Which 1720 British financial bubble collapsed after the South Sea Company’s share price plunged?

The 1720 British financial bubble that collapsed after the South Sea Company’s share price plunged was the South Sea Bubble.

The South Sea Company received a government monopoly over trade with Spanish South America, although its actual trading opportunities were limited. In 1720, Parliament approved a plan for the company to assume part of Britain’s national debt, and enthusiasm drove its shares sharply upward.

Investors borrowed heavily to buy shares, while many newly formed companies attracted money with extravagant promises. When confidence weakened, the South Sea share price fell rapidly and ruined many investors.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also collapsed in 1720. Neither event was a modern stock-market crash in the narrow index-based sense, but both became lasting examples of speculative bubbles and financial contagion.