South Sea Bubble

About South Sea Bubble

A British stock bubble centered on the South Sea Company, granted a monopoly on trade with South America. Shares rose from 128 pounds in January to 1,000 pounds in August 1720, then collapsed to 150 pounds by October. Many investors were ruined, including Isaac Newton, who lost 20,000 pounds and famously remarked that he could calculate the motions of heavenly bodies but not the madness of people. Parliament investigated and found widespread corruption involving government officials. The Bubble Act of 1720 restricted joint stock companies for over a century.