alt Hacker NewsWhen a stock hits the public market, it gets incorporated into broad market index funds (subject to the rules of those funds). If an overvalues stock gets dumped onto the public market, then crashes after being bought by index funds, then holders of those index funds are harmed.
Are there examples of this and quantified losses? The only one I can think of is Nasdaq and SpaceX, but Nasdaq isn’t exactly an index lay people should be investing in, and it isn’t commonly owned anyway (maybe less than 1% own it). And I don’t think SpaceX has lost any Nasdaq 100 investors money yet.