[HDThoreaun]

I remember a ton of people talking about how FB ipo'd at way too high a valuation. Just checked and it opened at $38 and was $19 3 months later

[DanielHB]

I think this is usually the case for most IPOs, insiders cash out, index-funds buy in. Basically it is a one-time technique for investors to extract money from pensions.

If you try to configure the index-fund to avoid this problem it is not longer passively managed as each new stock needs to be evaluated in a (at least) semi-subjective manner.