Star hedge fund manager Eric Sprott admits he was taken aback by his company's less than stellar stock market debut Thursday, and figures short sellers were behind the massive trading volume.

"I have to believe or think or conclude that there must have been some significant short selling," Mr. Sprott, the founder, chairman, chief executive officer and controlling shareholder of Sprott Inc. [SII-T], himself a short-seller of no mean repute, said Friday.

"I can't believe that on a 20-million-share issue that 12 million shares, approximately, should trade - it's ludicrous, " he said in a telephone interview before stock markets opened Friday and the shares fell again.

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Mr. Sprott said this depends on whether investors believe in the strategy of betting heavily on precious metals, energy and other resources his firm has used to generate sparkling returns and a reputation as one of Bay Street's brightest shops.

"It's certainly a robust valuation if you don't believe in what we do," he said. "If you do believe in what we do, it's not that robust."

He also argued that market players who think the resource and energy boom may already have peaked are dead wrong.

"Everybody in the world is trying to call the end of resources," he declared. "They're just wrong every day and every day they look worse."

Mr. Sprott also cited his firm's rapid growth and strong returns in defending the IPO price.

"We've done well for a long time, we're doing well this year and we think we're well-positioned," he said. "If we can repeat our former performances, we will, I think, more than substantiate that valuation."