The South Sea Company became the symbol of the 1720 stock-market crash known as the South Sea Bubble.
Founded in 1711, the company received a government-backed monopoly over British trade with parts of Spanish South America, although its expected commercial opportunities were far greater than its actual results. In 1720, it took on part of the British national debt, helping fuel enthusiasm for its shares.
The share price rose from about £128 in January 1720 to roughly £1,000 in August. When confidence broke, the price collapsed, ruining many investors and provoking a political scandal in Britain. Parliament investigated company directors and government figures, and the episode helped shape later debates about financial regulation and public confidence.
The South Sea Bubble was not the only speculative boom of 1720. France’s Mississippi Company also collapsed, but that was a separate scheme and should not be given as the company at the center of the British episode.