What nickname describes the 1720 collapse of shares in the British South Sea Company?

The 1720 collapse of shares in the British South Sea Company is known as the South Sea Bubble. The company received a government-backed monopoly over British trade with Spanish South America, although its realistic trading prospects were far more limited than promotional claims suggested.

Investors drove the company’s share price sharply higher during 1720. The excitement encouraged speculation in other ventures, including companies with dubious or deliberately vague business plans. When confidence weakened, South Sea shares collapsed, ruining many investors and causing political scandal because prominent figures had participated in or promoted the scheme.

The South Sea Bubble was not an ordinary modern stock-market crash. It involved a joint-stock company, government debt conversion, promotion, leverage, and crowd speculation in an early financial market. Parliament investigated the episode, and the Bubble Act restricted the formation of some companies without a royal charter or parliamentary authorization. The separate Mississippi Bubble unfolded in France at roughly the same time.