What name is given to the 1720 collapse of shares in the South Sea Company?

The 1720 collapse of South Sea Company shares is called the South Sea Bubble.

The South Sea Company received special trading privileges and assumed part of Britain’s government debt. Its shares soared in 1720 as investors expected enormous profits from trade with Spanish territories in the Americas. Speculation spread beyond the company itself, and many people bought shares simply because prices were rising.

The price then collapsed later in 1720. Investors suffered heavy losses, and the scandal damaged public confidence in company directors and political figures. Parliament investigated the episode, and several participants were accused of corruption or improper enrichment.

The South Sea Bubble is often grouped with the Mississippi Bubble because both were major speculative collapses in 1720. They were separate schemes in Britain and France. The event is also not the same as Tulip Mania, an earlier Dutch speculative episode involving tulip bulbs.