The South Sea Bubble was the classic English stock-market bubble and crash of 1720.
The South Sea Company received special trading privileges and promoted expectations that its commercial opportunities would produce enormous wealth. Its share price rose rapidly as investors bought into the story and as speculation spread through London. The company’s stock reached about £1,000 in August 1720 before collapsing later that year.
The crash ruined many investors and damaged public confidence. Parliament investigated the company’s directors and found evidence of corruption and improper influence. The episode also affected prominent figures, including Isaac Newton, who invested and later described the difficulty of predicting speculative crowd behavior.
The South Sea Bubble occurred alongside the Mississippi Bubble in France, another famous financial collapse associated with John Law. They are related episodes, but the South Sea Bubble specifically concerns the English South Sea Company.