Which 1720 English company’s share-price collapse became known as the South Sea Bubble?

The 1720 English company whose share-price collapse became known as the South Sea Bubble was the South Sea Company.

Founded in 1711, the South Sea Company received a government-backed monopoly over British trade with parts of Spanish South America, although the practical trading opportunities were far more limited than many investors imagined. In 1720, the company proposed converting much of Britain’s national debt into its shares. Parliament approved the plan, and enthusiasm drove the price dramatically higher.

Shares rose from about £128 in January 1720 to roughly £1,000 by August. As confidence weakened, the price fell rapidly and reached about £175 by December. Investors included members of the political and financial elite, while the scandal damaged public trust and led to investigations.

The South Sea Bubble is often grouped with John Law’s Mississippi Bubble in France, which collapsed in the same year. They were separate schemes, although both demonstrated how government connections, credit expansion, promotional claims, and herd behavior could inflate asset prices.