The South Sea Bubble was the speculative bubble that burst in London in 1720 after South Sea Company shares soared and collapsed.
The South Sea Company had been established in 1711 and received a monopoly over British trade with Spanish South America in exchange for helping manage government debt. Its actual commercial prospects were far weaker than promotional claims suggested. When Parliament approved a plan allowing the company to convert government debt into shares, enthusiasm drove prices dramatically higher.
The price reached about £1,000 in August 1720 before collapsing later that year. Investors across social classes suffered losses, and the scandal damaged public confidence in financiers and politicians. The South Sea Bubble is often discussed alongside France's Mississippi Bubble, which also burst in 1720, but they were separate companies and separate schemes.