The 1720 British market collapse named after the company whose shares soared and then crashed was the South Sea Bubble.
The South Sea Company received a government-backed monopoly over trade with Spanish South America in 1711, but the commercial opportunities were far smaller than many investors imagined. In 1720, the company proposed converting part of the British national debt into its shares. Political support, promotional claims, and easy credit helped drive the price sharply upward.
South Sea shares rose from about £128 in January 1720 to around £1,000 in August. The price then collapsed, ruining many investors and causing a political scandal. Parliament investigated misconduct, and several prominent figures were accused of corruption or improper influence.
The South Sea Bubble happened alongside John Law’s Mississippi Bubble in France, and the two crises are sometimes discussed together. They were not the same company or scheme. The episode also led Britain to restrict the formation of joint-stock companies through the Bubble Act of 1720, although later historians debate how directly the legislation resulted from the crash.