Photo credit: arstechnica.com

Backblaze Faces Financial Scrutiny Amid Falling Stock Prices

Backblaze, the cloud storage and backup service, marked its public debut in November 2021, managing to raise $100 million. However, recent assessments reveal a troubling trend: since its IPO, the company has reported losses in every quarter, its share count has surged by 80 percent, and its stock price has plummeted by 71 percent, according to Morpheus, a research firm.

In the wake of Morpheus’ findings, Investing reported that shares of Backblaze saw a significant drop of 8.3 percent on Thursday, intensifying worries among its investors.

The implications of these financial struggles extend beyond shareholders to the small businesses and individuals who depend on Backblaze for data backup solutions. A recent article by How-To Geek highlighted that, if the Morpheus report is correct, Backblaze may not be on the path to profitability. In its Q4 2024 earnings statement [PDF], the company announced a net loss of $48.5 million, following a net loss of $59.7 million in 2023.

Furthermore, the publication cautioned that “if Backblaze suddenly shuts down, customers might lose access to existing backups,” raising alarms for users of the service.

Company’s Response

In response to the growing concerns regarding its financial health and the potential impact on customer data, Backblaze engaged with Ars Technica to address the issues. Patrick Thomas, Backblaze’s VP of marketing, dismissed Morpheus’ assertions as “baseless,” stating:

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 further asserted that independent reviews have not substantiated any claims of wrongdoing regarding Backblaze’s public financial disclosures. “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,” he emphasized.

Looking ahead, Backblaze is set to announce its Q1 2025 results on May 7. Regardless of the uncertainties surrounding its financial situation and legal challenges, adhering to the 3-2-1 backup rule remains a crucial practice for users to safeguard their data.

Source
arstechnica.com