The 1720 British speculative bubble linked to the collapse of South Sea Company shares was the South Sea Bubble.
The South Sea Company was granted a monopoly over British trade with parts of Spanish South America, although its actual trading prospects were far less valuable than many investors believed. The company also arranged to assume part of the British government’s debt, helping its shares gain prestige and political support.
Its share price rose dramatically in 1720 as investors rushed to participate. The boom attracted imitators and promoters, while Parliament passed the Bubble Act to restrict unauthorized joint-stock companies. When confidence broke later that year, South Sea shares collapsed and ruined many investors.
The South Sea Bubble is commonly discussed alongside France’s Mississippi Bubble, which also burst in 1720. The two episodes are related examples of early modern financial speculation, but they involved different companies and markets. The scandal also damaged the reputations of prominent politicians and financiers.