Which company’s share-price collapse in 1720 helped trigger the British South Sea Bubble crash?

The South Sea Company’s share-price collapse in 1720 helped trigger the British South Sea Bubble crash.

The company’s shares rose dramatically in 1720 as investors accepted ambitious claims about its trading prospects and its plan to convert government debt into company stock. Speculation spread through London, and many buyers purchased shares at prices far above plausible business value.

By late 1720, confidence weakened and the share price collapsed. Thousands of investors suffered losses, including prominent figures and members of the political establishment. Parliament investigated the scandal, revealing corruption and improper influence.

The South Sea Bubble was part of a wider European speculative episode. France’s Mississippi Company bubble also burst in 1720, but it was a separate scheme. The South Sea Company itself continued in a reduced role after the crash and did not simply vanish immediately.