Which 1720 English company’s collapse became the classic South Sea Bubble stock-market crash?

The 1720 English company whose collapse became the classic South Sea Bubble crash was the South Sea Company.

Founded in 1711, the South Sea Company received a government-backed monopoly over British trade with parts of Spanish America, although the commercial opportunities were far less valuable than many investors imagined. In 1720, Parliament approved a proposal allowing the company to help convert government debt into shares, and its stock price rose dramatically.

Promotional claims, easy credit, and speculative buying drew in investors from across English society. The price peaked at roughly £1,000 per share before collapsing later in 1720. Many investors lost fortunes, and the scandal damaged public confidence in financial promoters and political leaders. The South Sea Bubble occurred alongside John Law’s Mississippi Bubble in France, but the two were separate schemes. The episode helped establish “bubble” as a lasting term for a market boom built on unrealistic expectations.