What 1720 speculative bubble caused the collapse of shares in the South Sea Company?

The 1720 speculative episode involving the South Sea Company was the South Sea Bubble. Its collapse ruined many investors in Britain and damaged public confidence in joint-stock companies.

The company received special privileges connected with Britain’s government debt and promoted grand expectations about trade with Spanish America. Its shares rose rapidly as investors speculated, and the boom attracted people from many social classes. When confidence broke, the price fell sharply.

The South Sea Bubble is often discussed alongside John Law’s Mississippi Bubble in France, which also collapsed in 1720. They were separate schemes in different countries, although both demonstrated how government finance, promotional claims, credit, and speculation could combine to produce a market crisis.