The 1720 speculative collapse involving the South Sea Company was the South Sea Bubble.
The South Sea Company received a monopoly over British trade with parts of Spanish South America, although its practical trading opportunities were limited. In 1720, it proposed converting government debt into company shares, and enthusiasm for its prospects drove the share price dramatically higher.
Investors bought shares amid intense speculation, and the company’s price reached about £1,000 in August 1720. Confidence then reversed. By December, the price had fallen to roughly £100, causing major losses for shareholders and exposing corruption and political influence.
The same year also saw John Law’s Mississippi Bubble in France. The two episodes are often discussed together as Europe’s great bubbles of 1720, but they were separate companies and separate schemes. The South Sea Bubble led to parliamentary investigations and financial reforms.