Which company’s shares formed the center of London’s 1720 South Sea Bubble?

The South Sea Company’s shares formed the center of London’s 1720 South Sea Bubble.

Founded in 1711, the company received a monopoly over British trade with Spanish South America in exchange for helping manage government debt. In practice, the expected trade opportunities were far smaller than many investors imagined, but promotional claims and rising share prices attracted intense speculation.

During 1720, Parliament approved a plan allowing the company to convert large amounts of government debt into its shares. The price surged from about £100 in January to more than £1,000 in August before collapsing. Investors borrowed heavily or joined the market through speculative schemes, and the eventual collapse ruined many fortunes.

The South Sea Bubble was part of a wider European speculative episode that also involved John Law’s Mississippi Company in France. The scandal led to investigations and damaged public trust, although the popular claim that Isaac Newton lost his entire fortune is an oversimplification: he did lose heavily after selling and later re-entering the market.