Which speculative bubble burst after the Mississippi Company’s share price collapsed in 1720?

The collapse of the Mississippi Company’s share price produced the Mississippi Bubble in 1720.

The company, associated with John Law, received a monopoly over trade and colonization connected with French Louisiana. Law also controlled a bank and promoted the idea that the company’s future commercial wealth would justify rapidly rising shares. Investors bought shares with money and credit, driving prices to extraordinary levels.

Confidence broke when holders tried to convert paper wealth into more stable money and doubts spread about the company’s real earnings. The share price fell sharply, damaging investors and weakening trust in Law’s financial system. Law fled France after the collapse.

The Mississippi Bubble occurred in the same year as Britain’s South Sea Bubble, but the schemes were separate. Both became famous examples of speculative finance, and both showed how monopolies, easy credit, persuasive promotion, and unrealistic expectations could inflate asset prices.