Which British company’s collapse marked the end of the South Sea Bubble in 1720?

The South Sea Company’s collapse marked the end of the South Sea Bubble in 1720.

The company received a government-backed monopoly over trade with parts of Spanish America and became the center of a speculative boom in London. Its shares rose dramatically as investors were attracted by optimistic claims, political connections, and the prospect of converting government debt into company stock.

The company’s trading prospects were far smaller than many buyers imagined. As confidence weakened, selling spread through the market. The share price fell from a peak near £1,000 in August 1720 to about £124 by December.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same year. They were separate schemes, although both demonstrated how credit, promotional stories, and herd behavior could inflate asset prices. Parliament later investigated corruption, and the Bubble Act restricted the creation of joint-stock companies.