The South Sea Bubble was the 1720 speculative bubble centered on the British South Sea Company.
The company received a monopoly over British trade with parts of Spanish South America, although the practical trading opportunities were much smaller than many investors imagined. It also took on portions of the British national debt. Promoters and speculators pushed the company’s shares dramatically higher, attracting investors from across British society.
The price collapsed later in 1720, ruining many shareholders and damaging public confidence in joint-stock companies. Parliament investigated the scandal, and several politicians and company directors were accused of corruption. The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same year. Neither event was a modern stock-market crash in the electronic-market sense, but both are classic examples of financial speculation and collapse.