The South Sea Company became famous for the 1720 stock-market collapse known as the South Sea Bubble.
Founded in 1711, the company received a British government contract connected with trade to Spanish South America and also took on government debt. Its shares rose dramatically in 1720 as investors expected enormous commercial profits. Speculation spread beyond the company itself, with many people buying shares in newly formed ventures and other fashionable investments.
Confidence collapsed later in 1720. As share prices fell, investors rushed to sell, and the resulting losses damaged many individuals and institutions. Parliament investigated the conduct of company directors and politicians, while the Bank of England and other financial interests became associated with efforts to manage the crisis.
The South Sea Bubble is often mentioned alongside France's Mississippi Bubble, another major speculative collapse of 1720. The two were separate schemes, however: the South Sea Company was British, while the Mississippi Company was associated with John Law's financial system in France.