If you refer to Michael Burry statements about the ETF bubbles and assume that everyone will go buying index ETF.
Logically, I think it is impossible
- Major shareholders are holding company stock directly
- Index fund usually don't run the operations
- There are always people want to sells the funds like they holding a stock. E.g. balance the portfolio between index funds against stocks or even against a different index.
In fact, what Michael Burry is worry about is the index fund become the hand that pushing the index itself. IMHO, this is somewhat impossible, as a prudent investor should spread their portfolio and hunt for underperformed company stock.
However, this doesn't mean it will not happen, i.e. this is indeed a serious issue in the immatured emerging small country market. This is not happening to those country index fund, but to the small country sovereignty fund Price Keeping operations (PKO, a synonyms abbreviation pun to United nation Peace Keeping Operations). I.e. that sovereignty funds bureaucratic will systematically apply an algorithm to "stabilise" the index.
is it possible that the total amount of money-weighted to a stock issued by company X exceeds the market capitalization of X.
It already happens. Indeed, people will attempt to buy in-advanced on potential gains. Thus you will see some hot company stock trade under very high Price earning ratio. Nevertheless, it cannot goes up indefinitely.