Which company’s share-price collapse defined Britain’s 1720 South Sea Bubble?

The South Sea Company’s share-price collapse defined Britain’s 1720 South Sea Bubble.

The company was founded in 1711 to trade with Spanish America, but its commercial prospects were limited by war and Spanish restrictions. Its shares became extraordinarily popular after the government converted debt into company stock and promoted expectations of profitable overseas trade.

Prices rose from about £100 in early 1720 to roughly £1,000 in August. Investors included members of the aristocracy and influential politicians. When confidence weakened, selling spread rapidly, and the price fell back toward £100 by December.

The episode is often confused with France’s Mississippi Bubble, which collapsed in the same year. The South Sea scandal also led to parliamentary investigations and public anger over misleading promotion and insider dealing. It became one of the best-known early examples of a speculative stock-market bubble followed by a crash.