Which London-based company collapsed during the 1720 South Sea Bubble?

The South Sea Company was the London-based company whose collapse helped define the 1720 South Sea Bubble.

Founded in 1711, the company received a monopoly over British trade with parts of Spanish America, although its practical trading opportunities were limited. It also assumed a large portion of the British national debt. Promotional claims and speculative enthusiasm pushed its share price dramatically higher during 1720.

The bubble burst later that year when confidence failed and investors rushed to sell. The company’s shares fell from a peak near £1,000 to roughly £100 by December. The collapse ruined many investors and damaged public trust in joint-stock companies and financial promoters.

The South Sea Bubble was not an ordinary modern stock-market crash. It was a famous early speculative bubble involving the South Sea Company in Britain, John Law’s Mississippi Company in France, and broader speculation. Parliament investigated the disaster, and several directors were accused of corruption.