The South Sea Bubble collapsed in Britain in 1720.
The South Sea Company received a government-backed plan to convert public debt into company shares, encouraging widespread speculation. Investors were attracted by rising prices and expectations of profitable trade with Spanish America.
Shares climbed dramatically during the first half of 1720, but the company’s trading prospects could not justify the valuations. Parliament also approved competing bubble companies, and confidence began to break later that year.
The collapse ruined many investors and caused a political scandal involving company directors and government figures. The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720, although the two schemes were separate.