Editing South Sea Company (section)

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[[File:South Sea Bubble Cards-Tree.png|thumb|Tree caricature from Bubble Cards.]]
The price of the stock went up over the course of a single year from about £100 to almost £1,000 per share. Its success caused a country-wide frenzy—[[herd behavior]]<ref name=":1" />—as all types of people, from peasants to lords, developed a feverish interest in investing: in South Seas primarily, but in stocks generally. One famous apocryphal story is of a company that went public in 1720 as "a company for carrying out an undertaking of great advantage, but nobody to know what it is".<ref>{{cite web |last1=Odlyzko |first1=Andrew |title=An undertaking of great advantage, but nobody to know what it is: Bubbles and gullibility |url=http://www.dtc.umn.edu/~odlyzko/doc/mania17.pdf |website=University of Minnesota |access-date=22 October 2020}}</ref>

The price finally reached £1,000 in early August 1720, and the level of selling was such that the price started to fall, dropping back to £100 per share before the year was out.<ref>{{cite magazine |title=Der geplatzte Traum vom schnellen Geld |language=de |first=Peter |last=Alter |author-link=Peter Alter |magazine=[[Damals]] |year=2018 |volume=50 |issue=8 |pages=72–76}}</ref> This triggered [[bankruptcies]] amongst those who had bought on credit, and increased sales, including [[short selling]]{{citation needed|date=January 2018}} (i.e., selling borrowed shares in the hope of buying them back at a profit if the price fell).

Also, in August 1720, the first of the installment payments of the first and second money subscriptions on new issues of South Sea stock were due. Earlier in the year John Blunt had come up with an idea to prop up the share price: the company would lend people money to buy its shares. As a result, many shareholders could not pay for their shares except by selling them.{{citation needed|date=January 2018}}

Furthermore, a scramble for liquidity appeared internationally as "bubbles" were also ending in Amsterdam and Paris. The collapse coincided with the fall of the [[Mississippi Company]] of [[John Law (economist)|John Law]] in France. As a result, the price of South Sea shares began to decline.{{Citation needed|date=November 2023}}