Backblaze went public in November 2021 and raised $100 million. Morpheus noted that since then, “Backblaze has reported losses every quarter, its outstanding share count has grown by 80 percent, and its share price has declined by 71 percent.”

Following Morpheus’ report, Investing reported on Thursday that Backblaze shares fell 8.3 percent.

Beyond the financial implications for stockholders, Morpheus’ report has sparked some concern for the primarily small businesses and individuals relying on Backblaze for data backup. Today, for example, How-To Geek reported that “Backblaze backups might be in trouble,” in reference to Morpheus’ report. The publication said that if Morpheus’ reporting was accurate, Backblaze doesn’t appear to be heading toward profitability. In its Q4 2024 earnings report [PDF], Backblaze reported a net loss of $48.5 million. In 2023, it reported a net loss of $59.7 million.

“If Backblaze suddenly shuts down, customers might lose access to existing backups,” How-To Geek said.

Backblaze responds

Ars Technica reached out to Backblaze about its response to concerns about the company’s financials resulting in lost backups. Patrick Thomas, Backblaze’s VP of marketing, called Morpheus’ claims “baseless.” He added:

The report is inaccurate and misleading, based largely on litigation of the same nature, and a clear attempt by short sellers to manipulate our stock price for financial gain.

Thomas also claimed that “independent, third-party reviews” have already found that there have been “no wrongdoing or issues” with Backblaze’s public financial results.

“Our storage cloud continues to deliver reliable, high-performance services that Backblaze customers rely on, and we remain fully focused on driving innovation and creating long-term value for our customers, employees, and investors,” Thomas said.

Backblaze will announce its Q1 2025 results on May 7. Regardless of what lies ahead for the company’s finances and litigation, commitment to the 3-2-1 backup rule remains prudent.