Which company’s share price collapsed in 1720 during Britain’s South Sea Bubble?

The South Sea Company was the company whose share price collapsed in 1720 during Britain’s South Sea Bubble.

The company was founded in 1711 to trade with Spanish South America, but its practical commercial opportunities were far smaller than investors expected. In exchange for taking on government debt, it received valuable-seeming trading privileges and promoted confidence in its future.

Its shares rose dramatically in 1720 as Parliament approved a plan for the company to convert more government debt into equity. Speculation spread through London, and many investors bought shares with borrowed money. When confidence weakened, selling accelerated and the price plunged.

The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, which also burst in 1720. The episode led to parliamentary investigations, damaged prominent investors, and helped create lasting skepticism about promotional schemes. The company itself survived for decades afterward, but its speculative expansion had ended.