The 1720 British financial bubble that collapsed after investors rushed to sell South Sea Company shares was the South Sea Bubble.
The South Sea Company received a government-backed trading monopoly and took over part of Britain’s national debt. Speculation drove its share price dramatically higher during 1720, even though the company’s real trading prospects could not justify the valuation. Investors from many social classes joined the buying frenzy.
The bubble began to unravel later in 1720. As confidence weakened, selling spread, prices fell, and many investors suffered severe losses. The scandal damaged public trust in company promoters and exposed failures in financial oversight.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same period. It was not a stock-market crash in the modern, index-based sense, but a major early example of speculative financial collapse.