Which London-based company became famous for the South Sea Bubble crash of 1720?

The London-based company famous for the South Sea Bubble crash of 1720 was the South Sea Company.

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 profits were far less substantial than promoters suggested. The company’s shares nevertheless rose dramatically as investors bought into optimistic claims and speculative excitement.

Parliament approved a restructuring plan that allowed the South Sea Company to convert more government debt into shares. Prices climbed to about £1,000 in August 1720 before collapsing later that year. Many investors lost fortunes, and the scandal damaged public trust in company promotion and political influence.

The same speculative period also involved John Law’s Mississippi Company in France. That is why the two episodes are sometimes discussed together, but the British bubble was specifically centered on the South Sea Company. The Bubble Act of 1720 followed the crisis and restricted the creation of joint-stock companies without a charter.