Which 18th-century British company collapsed after the South Sea Bubble burst in 1720?

The South Sea Company collapsed after the South Sea Bubble burst in 1720. Founded in 1711, the company received a monopoly over British trade with parts of Spanish America, although the expected commercial opportunities were far smaller than promotional claims suggested.

The company’s shares soared in 1720 as investors were encouraged to exchange government debt for company stock and as speculation spread through London. Directors and promoters helped create unrealistic expectations, while Parliament’s Bubble Act restricted many competing joint-stock schemes. When confidence broke, the share price plunged and many investors suffered ruin.

The South Sea Bubble was part of a wider European speculative episode that also involved France’s Mississippi Company. A common mistake is to describe the South Sea Company as an ordinary modern stock exchange; eighteenth-century trading operated through coffeehouses and brokers, and the company’s collapse was tied closely to government debt and political influence.