Which British company became the central target of speculation during the South Sea Bubble of 1720?

The South Sea Company became the central target of speculation during the South Sea Bubble of 1720.

Founded in 1711, the company received a government-backed role connected with converting portions of Britain’s national debt. Investors were attracted by expectations of profitable trade with Spanish-controlled South America, although those expectations were far greater than the company’s practical trading opportunities.

Its share price rose dramatically in 1720 as the company promoted ambitious prospects and investors speculated on continued increases. The boom spread beyond the company itself, with many ventures seeking money from the public. When confidence broke, South Sea shares collapsed, ruining investors and causing a wider financial crisis in Britain.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same year. They were separate schemes and companies. The South Sea Company was British; the Mississippi Company was associated with John Law’s financial system in France.