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Backblaze: Mounting Losses, Lawsuits, Sham Accounting, Insider Selling
Summary * Backblaze (NASDAQ:BLZE) is a $250 million cloud storage and backup solution provider based in California that operates through two business segments: B2 Cloud Storage allowing “customers to store data” and “developers to build applications,” and Computer Backup that “automatically backs up data” from devices for “virtually unlimited” storage.
Throughout our investigation, we found Backblaze’s track record reveals a management team lacking in transparency and willing to take aggressive and possibly illegal steps to create an illusion of financial performance to support their own exit liquidity. 2] Supporting the claims of the two whistleblowers, Backblaze co-founder and Chief Technology Officer (“CTO”) Brian Wilson made it abundantly clear in an internal email that he was completely justified in his sell off, per Kisner’s complaint. To keep its capital markets story alive, Backblaze has fed its auditor fraudulent projections, hidden internal investigations from shareholders, and engaged in accounting tricks to inflate profitability metrics, per allegations in lawsuits and our own research.
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