In 1719, France established a company named the Mississippi Company. Its main business was to develop a colony in the Mississippi Valley, downstream in central America. If this task were accomplished, it would have ensured the kingdom's vast interests in America. To obtain the funds for this plan, the company, which had deep ties with the royal court, sold its shares in the stock market.
And distinguished personages who could represent the court, considering various factors, greatly hyped the company's stocks. This led to everyone in the kingdom having tremendous confidence in the company's shares. In May 1719, when the company's shares were listed, the stock price was 500 livres. By August 1 of that year, the stock price had risen more than fivefold. On August 30, the stock price broke through the 4,000 barrier.
And such a surge lasted for 13 months. At its peak, the stock price of the Mississippi Company was more than twenty times its initial listing price.
