The Mississippi Company collapsed in 1720 during France's Mississippi Bubble, another famous early market crash. The company was promoted by Scottish financier John Law and was linked to a claimed monopoly over French trade and development in North America.
Law's system combined a bank, paper money, government debt conversion, and company shares. Investors bought shares in the expectation of immense profits from the Mississippi territory, and prices rose far beyond what the company's actual commercial prospects could justify.
When confidence in the paper currency and shares failed, investors rushed to sell. The bubble burst, Law fled France, and the episode damaged public trust in paper finance. The Mississippi Bubble occurred in the same year as Britain's South Sea Bubble, but the companies, governments, and institutional arrangements were different.