The South Sea Company’s collapse triggered the 1720 British stock-market crash known as the South Sea Bubble.
The company was founded in 1711 to trade with Spanish America, but its commercial prospects were limited. Investors became more interested in its government-backed scheme to convert national debt into company shares. Speculation drove the share price sharply higher during 1720.
Parliamentary support, promotional claims, easy credit, and widespread public enthusiasm helped inflate the bubble. When confidence weakened, selling accelerated. The share price fell dramatically, ruining many investors and exposing corruption among politicians and company directors.
The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which collapsed in the same year. They were separate companies and schemes, although both reflected the intense speculative culture of 1720. The episode helped shape later British debates about financial regulation and corporate promotion.