Which 1720 speculation bubble collapsed after the South Sea Company’s share price soared?

The 1720 speculation bubble surrounding the South Sea Company was the South Sea Bubble.

The South Sea Company received trading privileges connected with Spanish South America and also became involved in converting British government debt into company shares. Public enthusiasm pushed its price dramatically higher in 1720. Investors bought in expectation of immense commercial profits, although the company’s actual trade prospects were far less impressive than the promotional excitement suggested.

When confidence weakened, the share price collapsed later that year. Many investors lost fortunes, and the scandal damaged public trust in company promotion and financial speculation. Parliament investigated the affair, revealing corruption and conflicts of interest among influential figures.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also collapsed in 1720. They were separate schemes, however. Another common confusion is linking the episode directly to the 1630s Dutch tulip mania; that earlier speculation involved bulbs rather than a publicly traded company organized around government debt and overseas commerce.