Backblaze Investors Under Scrutiny: Rosen Law’s Class Action Probe Heats Up

The cloud backup giant Backblaze, Inc. (NASDAQ: BLZE) is facing renewed legal pressure as Rosen Law Firm launches a securities class action investigation into alleged financial misstatements and accounting irregularities. The probe, triggered by a damning short report from Morpheus Research, has already caused the stock to plummet, raising red flags for investors.

The Allegations Unfold
The controversy stems from a scathing report published by Morpheus Research on April 24, 2024, which accused Backblaze of inflating revenue forecasts, manipulating audit thresholds, and engaging in “financial gymnastics” since its November 2021 IPO. The report alleged that the company’s growth claims were unsustainable and that its financial disclosures were misleading to investors.

While the report initially caused a brief dip in Backblaze’s stock, the full impact materialized over a year later. On April 24, 2025, BLZE shares fell 2.1%—a stark reaction to renewed attention on the allegations. This decline, as noted by Investing.com, underscores investor skepticism about the company’s transparency and long-term viability.

Rosen Law Steps In
Rosen Law Firm, a powerhouse in securities litigation, has now taken up the case, seeking to recover losses for investors who bought BLZE shares during the period in question. The firm operates on a contingency fee basis, meaning plaintiffs pay nothing upfront unless the case succeeds—a critical factor for individual investors.

The firm’s track record is formidable: it secured $438 million in recoveries for investors in 2019 alone and holds the distinction of the largest-ever securities class action settlement against a Chinese company. Rosen Law has also been ranked No. 1 by Institutional Shareholder Services (ISS) for securities class action settlements in 2017, and among the top four firms since 2013.

Why This Case Matters
The Backblaze case highlights two critical risks for investors in the tech sector:
1. Post-IPO Scrutiny: Companies that go public often face heightened attention from short sellers and regulators. Backblaze’s 2021 IPO came amid a broader tech IPO boom, but its alleged missteps suggest vulnerabilities in how some firms manage growth expectations.
2. Accounting Transparency: The Morpheus report’s focus on audit threshold inflation—a practice where companies tweak metrics to meet compliance standards—speaks to broader concerns about corporate governance in the tech industry.

For investors, the stakes are clear: if Rosen’s investigation substantiates the allegations, BLZE shareholders could face significant recoveries. However, the case is still in its early stages, and outcomes hinge on evidence and legal strategy.

The Path Forward
Rosen Law urges eligible investors to act promptly to join the class action. Those who purchased BLZE shares between the IPO and the April 2025 stock drop can submit claims via the firm’s dedicated portal (https://rosenlegal.com/submit-form/?case_id=38633) or by contacting attorney Phillip Kim at 866-767-3653.

While the case remains unresolved, Rosen’s history suggests investors have a credible ally. The firm’s 2020 recognition of founding partner Laurence Rosen as a “Titan of the Plaintiffs’ Bar” by Law360 underscores its clout in high-stakes litigation.

Conclusion
Backblaze’s legal battle exemplifies the risks of aggressive growth narratives in the tech sector. With Rosen Law’s involvement and a documented 2.1% stock drop tied to the allegations, the company’s credibility—and investor confidence—are on the line.

The data paints a cautionary picture: tech firms that prioritize short-term growth over transparency often face steep consequences. For BLZE shareholders, Rosen’s track record—securing hundreds of millions in settlements—offers a lifeline. But as with any class action, time is critical. Investors must move swiftly to preserve their rights, lest they miss deadlines and lose their chance to recover losses.

In the end, this case isn’t just about Backblaze—it’s a reminder that in markets built on trust, the fallout from broken promises can linger for years.