Which 1720 speculative episode saw shares of the South Sea Company collapse in Britain?

The 1720 speculative episode in Britain involving collapsing South Sea Company shares was the South Sea Bubble.

The South Sea Company received a government-backed monopoly over trade with Spanish South America in 1711. In practice, its commercial opportunities were far smaller than many investors imagined. The company later took on much of Britain’s national debt, and enthusiasm for its shares drove prices dramatically higher during 1720.

When confidence weakened, the share price fell sharply. The collapse ruined many investors and exposed misleading promotion, insider dealing, and weak regulation. Parliament investigated the scandal, and several influential figures were implicated. The episode also affected Isaac Newton, who reportedly lost money after re-entering the market.

The South Sea Bubble is often mentioned alongside France’s Mississippi Bubble, another major 1720 financial collapse. They were separate schemes, although both reflected the period’s speculative excitement and faith in monopoly-backed companies.