The South Sea Bubble was the 1720 speculative crisis surrounding the South Sea Company, whose shares reached about £1,000 before collapsing.
The company received a government-backed role in managing part of Britain’s national debt and promoted expectations of profitable trade with Spanish-controlled areas of the Americas. Investors bought shares rapidly, and Parliament passed the Bubble Act during the frenzy, restricting some companies outside approved charters.
South Sea Company shares rose from roughly £100 early in 1720 to around £1,000 in August. The price then fell sharply as confidence weakened and investors tried to sell. Many shareholders, including prominent figures, suffered heavy losses, and the scandal produced political investigations.
The South Sea Bubble was not the same event as France’s Mississippi Bubble, although both occurred in 1720 and were connected to ambitious company schemes and speculative enthusiasm. The episode became a classic example of financial bubbles driven by leverage, publicity, and expectations that outrun underlying business results.