 Coprinellus micaceus is a saprotrophic species , deriving nutrients from dead and decomposing organic matter , and grows in and around stumps or logs of broad @-@ leaved trees or attached to buried wood . It prefers feeding on bark , particularly the secondary phloem , rather than the wood . In the scheme of the succession of fungal species involved in the decomposition of wood , C. micaceus is a late stage colonizer , and prefers to feed on wood that has already decomposed sufficiently to have reached " a friable softened consistency " . A 2010 study suggests that the fungus can also live as an endophyte , inhabiting the woody tissue of healthy trees without causing disease symptoms . The fungus is also associated with disturbed or developed ground , such as the sides of roads and paths , gardens , building sites and the edges of parking lots ; it has also been noted for growing indoors on rotting wood in humid environments . In one instance it was discovered about 120 m ( 400 ft ) underground in an abandoned coal mine , growing on wooden gangways and props used to support the roof . 
