Which British company became the central victim of the 1720 South Sea Bubble collapse?

The South Sea Company was the British company at the center of the 1720 South Sea Bubble collapse.

Founded in 1711, the company received a monopoly over British trade with parts of Spanish America in exchange for taking on government debt. Its actual commercial prospects were limited, but expectations about future wealth drove its share price sharply upward in 1720. Investors of many social classes bought shares as speculation spread through London.

The company’s price reached about £1,000 per share in August 1720 before confidence broke. Selling then accelerated, and the price fell dramatically by the end of the year. The collapse ruined many investors and exposed misleading promotions, insider dealing, and weaknesses in financial regulation.

The South Sea Bubble happened alongside the Mississippi Bubble in France, which centered on the Mississippi Company and John Law’s financial system. Those events are often discussed together, but they involved different companies and governments. The episode helped make “bubble” a lasting term for a market price surge detached from sustainable business prospects.