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BLZE heads into its November 2 earnings report with short sellers rebuilding positions at pace while the stock pulls back from a remarkable year-to-date run.
The short interest story is the week's defining tension. Bears have added meaningfully over the past month: short interest has climbed to 11.6% of the free float, up more than 5% on the week and representing a more than threefold increase over the past 30 days. That is a striking shift for a stock that was sitting with under 4% short interest in early September. The move suggests that a meaningful cohort of market participants sees the recent re-rating, BLZE is still up sharply year-to-date despite losing 9.3% this week to close at $12.51, as an opportunity to press the short side ahead of the print. Borrow conditions, though, do not yet look strained. Availability remains loose at roughly 452% of short interest, meaning there are more than four shares available to borrow for every one currently lent out, and cost to borrow, though up 70% on the week, has only reached 0.50%. That is not a squeeze setup: it is a crowded-but-accessible short.
Options traders are not reinforcing the bearish lean. The put/call ratio of 0.17 is barely changed from its 20-day average of 0.17, a z-score near zero, and the reading sits far below the 52-week high of 0.46. Call open interest is dominant by a wide margin, which means options participants are positioned more for upside than the growing short book might imply. The divergence between a rapidly building short position and a call-heavy options market is the clearest signal ambiguity in the setup right now.
The Street remains constructive despite the selloff. All four analysts covering BLZE carry buy-equivalent ratings, with a mean price target around $22.83, implying substantial upside from current levels. The most recent reiteration, Needham holding its $23 target in mid-September, has held firm. The bull case centres on Backblaze's position as an AI infrastructure enabler: its no-egress-fee B2 Cloud Storage product, B2 ARR growing 28% year on year, net revenue retention at 110%, and the $335 million CoreWeave partnership give the stock a credible growth story heading into the print. Bears counter that the company remains loss-making, capex obligations tied to large customer ramps are uncertain, and competition from AWS, Google, and Microsoft is unrelenting. Valuation reflects the bull momentum: the stock trades at a P/E of 47 times and a price-to-book of 8.5 times, both of which have eased modestly over the past week alongside the price decline. The ORTEX short score of 55 sits in the 17th percentile for short-score rank, suggesting the borrowing market sees this as elevated but not extreme positioning.
Ownership data adds one notable data point. BlackRock disclosed a position of 7.6% of shares in late September, adding more than a million shares in the period, the largest single institutional increase on the register. Vanguard, by contrast, appears to have exited its 13G-level stake entirely, filing to 0% in March after previously holding 5.4%. Driehaus Capital entered with a new position of 4.3% of shares as of June. The net picture is one of active rotation among institutional holders rather than a uniform directional signal. The CEO and CFO both sold small amounts at around $15.82 in August, discretionary open-market sales rather than planned 10b5-1 disposals, though the dollar values involved ($203,000 and $33,000 respectively) are modest relative to company scale.
Past earnings reactions provide useful context. The most recent print, in September, produced an 11.4% single-day drop followed by a further slide to minus 5.6% over five days. The print before that, in August, swung the opposite way: plus 44% on day one and plus 40% over five days. Backblaze has a history of large binary moves on results day, and with short interest now back at elevated levels and the stock down from its post-August highs, the gap between what bulls and bears expect from November 2 is wide. Whether the short rebuild ahead of that print represents informed positioning or a fading momentum trade is precisely what the next quarterly report will settle.
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