A few mutual funds invest mostly or entirely in preferred securities.

He also said the company was considering increasing the number of preferred securities to be issued in the restructuring, but gave no details.

To be sure, most investors in convertible preferred securities with such a protection against falling share prices don't short the stock.

IndyMac was taking new measures to preserve capital, such as deferring interest payments on some preferred securities.

Other equity securities, like convertible preferred securities, also experienced a drop in the amount issued.

Also, $200 million of convertible preferred securities.

The company also said it would appoint new directors to represent the interests of preferred securities that are in arrears.

Last summer, the company issued a very unusual preferred security that seemed almost certain to push the price of the stock lower.

The preferred securities were convertible into common stock within three months, at a price for each common share of $5 or less.

The stock was selling below $6.125 at the time, the price at which Wickes could call the preferred security.