What is "shakeout"

also shake-out, "business upheaval," 1895, from verbal phrase; see shake (v.) + out (adv.).

n. 1 An event that causes marginal constituents to be eliminated. 2 (context engineering English) The separation of molds from their flask, the castings from the molding sand, and potentially the cores from the castings.

n. a financial condition that results in the elimination of marginally financed participants in an industry; "they glutted the market in order to cause a shakeout of their competitors"

Shakeout is a term used in business and economics to describe the consolidation of an industry or sector, in which businesses are eliminated or acquired through competition. It may also refer to a situation in which many investors exit their positions, often at a loss, due to uncertainty in the market or recent bad news circulating around a particular security or industry.

Shakeouts can often occur after an industry has experienced a period of rapid growth in demand followed by overexpansion by manufacturers. Large, diversified companies are often most able to endure a weak business climate and can benefit from shakeouts. A shakeout of investors and internet businesses occurred during the dot-com bubble.