I guess I unfairly maligned Eric Sprott. It turns out he was buying depressed silver stocks (maybe ECU?) with his sale of his silver PSLV ETF fund. From the Fundamental View Blog at http://thefundamentalview.blogspot.com/

MONDAY, MAY 2, 2011

Eric Sprott Explains/Defends Selling His Silver Units

After word broke about Silver bull Eric Sprott selling shares in his Silver ETF many questions were raised. Eric Sprott defends his position here in the The Globe and Mail. After a post this morning highlighted that Eric Sprott has sold about $34-million worth of units in his Sprott Physical Silver Trust (PHS.U-T19.48-2.17-10.02%), he wants to make it absolutely clear that he isn’t turning his back on the metal.

“We haven’t lost our enthusiasm for silver,” he told me Monday afternoon.

So why the sales? “Every dollar of money that was raised by selling shares of [the Trust]... was reinvested in silver or silver equities,” he said.

While silver’s (SI-FT43.89-4.71-9.70%) price per ounce has soared in recent months, “silver shares have not done as well, which is almost shocking in a way, and it looked like there were opportunities in either getting some premium on PSLV shares and buying silver or buying silver equities.” The sales were made at an average price of about $21, up from their $10 IPO price about six months ago.

But that doesn’t mean Mr. Sprott is abandoning his trust. He says he still holds around 25 per cent of the total trust units between his funds and his charitable foundation.

As for future public offerings following the IPO, he says he is sticking to a promise he has already made. “There will not be an offering that negatively impacts the premium on the PSLV,” he said.