Shakeout

Article summary

Shakeout is a term used in business and economics to describe two things: A shakeout refers to a period in which rapid growth and overexpansion in an industry is followed by consolidation. When this happens, stronger companies use their capital reserves to acquire or eliminate weaker companies that have overextended themselves. Large, diversified companies that are able to endure a weak business climate benefit from shakeouts. A shakeout also refers to a situation in which many investors exit their positions, often at a loss, due to uncertainty in the market or bad news circulating around a particular security or industry. This type of shakeout is also known as a market selloff or market correction. A shakeout of investors and internet businesses occurred during the dot-com bubble.

Key claims

No claims recorded.

Discussion questions

1. Summarise the article in your own words. Which single claim would you verify first, and why?
2. Which claim in this article is most likely to be revised as the sources update? How would you check its current status?
3. If two sources disagreed about one of these facts, what would you need in order to trust one over the other?

Bibliography

No sources recorded.