The South Sea Company became the symbol of Britain's 1720 stock-market collapse known as the South Sea Bubble.
Founded in 1711, the company received a government-backed monopoly over trade with parts of Spanish South America, although its practical trading opportunities were far more limited than many investors imagined. It also took on British government debt, helping connect its fortunes to public finance.
Its share price surged in 1720 as promotional claims, easy credit and speculative enthusiasm attracted investors. The price then collapsed when confidence failed, ruining many shareholders and damaging trust in joint-stock companies. Parliament investigated the scandal, and several directors were accused of corruption.
The South Sea Bubble occurred alongside the Mississippi Bubble in France, associated with John Law's financial system. The companies were different, however, and the British episode should not be treated as a single transatlantic corporation. The crash helped shape later British restrictions on corporate promotion and became one of history's classic examples of speculative excess.