The speculative British stock-market collapse of 1720 involving the South Sea Company was called the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America, although its realistic trading prospects were limited. In 1720, it proposed converting much of the British national debt into company shares, and influential political connections helped create confidence in the scheme.
Share prices rose dramatically as investors pursued easy profits. The company’s stock climbed from roughly £128 in January 1720 to about £1,000 in August. When confidence broke, the price collapsed, ruining many investors and causing a political scandal in Britain.
The episode was part of a wider speculative wave that also included John Law’s Mississippi Company in France. The term bubble refers to the inflated share price and its collapse, not to a literal economic bubble. Parliament investigated the scandal, and several directors faced severe consequences.