US~Observer Investigating Morpheus Research’s Alleged Short-Selling Tactics

Nate Anderson of the Now Defunct Hindenburg Research Business Endorses Morpheus Research

By US~Observer Staff

Morpheus Research, a supposed Investigative research business, was launched in early 2025 and is endorsed by Nate Anderson, the controversial founder of Hindenburg Research­. The online-only publication has unleashed a series of reports targeting Solaris Energy Infrastructure (SEI), Backblaze (BLZE), Abacus Global Management (ABL), and Mercurity Fintech Holding (MFH). These reports, laden with allegations of financial misconduct, have triggered devastating stock price declines, leaving investors and companies reeling. With undisclosed funding, unidentified Hindenburg Research alumni on staff, and alleged significant profits from short positions, Morpheus Research’s operations raise serious questions about transparency and ethics. The US~Observer, a respected, established national investigative newspaper committed to “helping innocent victims of false charges and prosecution”, emerges as a potential savior for these companies. Through its investigations into manipulative practices like naked short selling, defined as “the illegal practice of short-selling shares that have not been affirmatively determined to exist”, the US~Observer aims to expose any and all false allegations and protect market integrity. This article examines Morpheus Research’s reports, their market impact, and critical questions about funding, employee identities, report validity, profits, and reportedly potential collusion with hedge funds. The US~Observer is investigating whether or not Morpheus Research traded on insider information in violation of U.S. Securities and Exchange Commission (SEC) and Department of Justice (DOJ) regulations.

The US~Observer’s Mission

The US~Observer, based in Grants Pass, Oregon, is a renowned investigative news publication dedicated to uncovering corruption and defending those wrongfully accused. As stated on its platform, it is “both an on-line and print investigative news source helping innocent victims of false charges and prosecution.” Led by Editor in Chief Edward Snook, the US~Observer specializes in “vindicating people with false criminal charges and exposing corruption.” This mission extends to the financial realm, where companies like Solaris, Backblaze, Abacus, and Mercurity face potentially false allegations from alleged short sellers like Morpheus Research.

Morpheus Research and Nate Anderson

Nathan Anderson – X screen grab

Morpheus Research, launched in 2025, describes itself as dedicated to “exposing fraud and corporate misconduct in financial markets” through “deep-dive investigative research on companies that we feel are fundamentally misunderstood by the market.” Its reports, however, have sparked controversy due to their market-disrupting impact and lack of transparency. Nate Anderson, who founded Hindenburg Research in 2017, endorsed Morpheus Research on March 14, 2025, via an X post, stating, “This is a great team that I have known for a long time and includes some Hindenburg alumni. Definitely worth a follow.” Anderson claims no direct involvement, noting, “On a personal level, the employees of Hindenburg were the engine that saw us thrive and I am thrilled to see them spreading their wings on their own.” Hindenburg Research’s closure in January 2025, amid allegations of collusion with Anson Funds and a 2024 SEBI show-cause notice for using non-public information, together casts doubt on Morpheus Research’s credibility especially when coupled with Anderson’s public endorsement of Morpheus.

Morpheus Research’s Reports and Market Impact

Morpheus Research has published four reports, each disclosing short positions and causing significant stock price declines. Below is a detailed overview, including financial data, market caps, and stock impacts from reliable sources.

Solaris Energy Infrastructure (SEI)   

• Report Title: “Solaris Energy Infrastructure: How A Crumbling Texas Oilfield Services Company Gambled It All On A Convicted Felon And The World’s Richest Man”
• Publication Date: March 17, 2025
• Key Allegations: Accuses Solaris of risky ties to a convicted felon, five consecutive quarters of declining revenues from Q3 2022 to Q4 2023, and questionable accounting practices, such as depreciating gas turbines over 25 years (Solaris Report).
• Stock Impact: Shares dropped 16% to $20.58, with intraday declines reaching 19% (Solaris Tumble, Solaris News, Solaris Drop).
• Market Cap: Approximately $840.47M as of May 30, 2025 (SEI Market Cap, SEI Quote, Yahoo SEI).
• Disclaimer: “After extensive research, we believe the evidence justifies a short position in shares of Solaris Energy Infrastructure, Inc. (NYSE: SEI). Certain principals of Morpheus Research hold short positions in SEI, and Morpheus Research may profit from short positions held by others”. What an admission!

Backblaze (BLZE)

• Report Title: “Backblaze: A Loss-Making Data Storage Business Mired in Lawsuits, Sham Accounting, and Brazen Insider Dumping”
• Publication Date: April 24, 2025
• Key Allegations: Alleges $181.3 million in cumulative net losses since the 2021 IPO, 80% share dilution, $28.6 million in 2024 stock-based compensation, and whistleblower lawsuits from former executives claiming accounting fraud (Backblaze Report).
• Stock Impact: Shares fell 8.3% on April 24, 2025 (Backblaze Stock, Backblaze News, Backblaze Reddit).
• Market Cap: Approximately $250M as of April 24, 2025 (Backblaze Report, Yahoo BLZE, Finviz BLZE).
• Disclaimer: “After extensive research, we believe the evidence justifies a short position in shares of Backblaze (NASDAQ: BLZE). Morpheus Research holds short positions in BLZE, and Morpheus Research may profit from short positions held by others”. Sounds like a disclaimer that Nate Anderson would write!

Abacus Global Management (ABL)

• Report Title: “Abacus Global Management: This $740 Million SPAC Is Yet Another Life Settlements Accounting Scheme Manufacturing Fake Revenue By Systematically Underestimating When People Will Die”
• Publication Date: June 4, 2025
• Key Allegations: Claims Abacus inflates revenues through a “mark-to-model” accounting strategy, overstating returns up to 30% compared to the industry’s 12%, and faces risks from a $446 million life settlements portfolio (Abacus Report).
• Stock Impact: Shares fell over 30% in intraday trading on June 4, 2025 (Abacus Investigation, Abacus News, Abacus Refutation).
• Market Cap: Approximately $740M as of June 4, 2025 (Abacus Report, Yahoo ABL, Finviz ABL).
• Disclaimer: “After extensive research, we believe the evidence justifies a short position in shares of Abacus Global Management, Inc. (NASDAQ: ABL). Morpheus Research holds short positions in ABL”. Morpheus admissions keep on rolling!

Mercurity Fintech Holding (MFH)

• Report Title: “Mercurity Fintech: This Blatant Scam Run By Repeat Bad Actors Has Skyrocketed 400% On A Ridiculous AI & Fintech Facade”
• Publication Date: May 8, 2025
• Key Allegations: Labels Mercurity as a “blatant scam run by repeat bad actors” with a 400% stock surge driven by misleading AI and fintech claims (Mercurity Report).
• Stock Impact: Shares dropped 5% on May 8, 2025 (Mercurity Stock, Yahoo MFH, Mercurity News).
• Market Cap: Approximately $457.79M as of April 10, 2025 (Morningstar MFH, Yahoo MFH, Finviz MFH).
• Disclaimer: “After extensive research, we believe the evidence justifies a short position in shares of Mercurity Fintech Holding (NASDAQ: MFH). Morpheus Research holds short positions in MFH”. Nothing like admitting exactly what you are doing Morpheus!

Financial Data and Profit Inquiries

To our knowledge Morpheus Research has not disclosed specific profits from its short positions in SEI, BLZE, ABL, or MFH. The significant stock price declines—16% for SEI, 8.3% for BLZE, over 30% for ABL, and 5% for MFH—suggest substantial gains for Morpheus Research and its backers, as short-sellers profit from stock price drops. Without transparency about position sizes or profit-sharing arrangements, it is impossible to quantify their earnings. Similarly, no information is available on payments received by Morpheus Research for producing these reports, raising questions about potential financial incentives from third parties, such as hedge funds.

The US~Observer’s Role as a Potential Savior

The US~Observer’s investigative efforts could be pivotal for companies targeted by Morpheus Research. Its commitment to “helping innocent victims of false charges and prosecution” aligns with its focus on exposing financial misconduct, including naked short selling, which is “the illegal practice of short-selling shares that have not been affirmatively determined to exist.” The US~Observer’s article, “Four Steps of Naked Short Selling”, outlines how such practices can manipulate markets, positioning the US~Observer as a critical ally for Solaris, Backblaze, Abacus, and Mercurity. The US~Observer is explicitly “interested in exposing any and all false allegations against these companies,” providing a lifeline for those seeking to counter potentially unfounded claims and restore investor trust.

Critical Questions for Inquiry

The US~Observer’s investigation should address the following questions to uncover the truth behind “Morpheus Research’s operations:

1. Who Funds Morpheus Research?
   The firm’s undisclosed backers raise concerns about hidden agendas. “Hindenburg Research’s alleged collusion with Anson Funds, as revealed in a 2025 Ontario court case involving emails and trading records (Hindenburg Collusion), suggests Morpheus Research may have similar ties. Who is financing their operations, and are they receiving payments for targeting specific companies?
2. Who Are Morpheus Research’s Employees, Particularly These “Hindenburg Research Alumni”?
   Morpheus Research’s team includes Hindenburg Research alumni, but their identities are not public, raising questions about potential biases. Were these individuals involved in Hindenburg Research’s controversial reports, such as those against Adani Group, which led to a 2024 SEBI show-cause notice for using non-public information (Adani-Hindenburg)?
3. How Valid Are Morpheus Research’s Reports?
   Morpheus Research’s short-selling motives suggest potential bias. Abacus refuted claims with independent actuarial valuations, stating, “Our valuations are supported by independent third-party actuarial analysis”. Independent audits of Solaris, Backblaze, Abacus, and Mercurity’s financials are needed to verify the allegations against them.
4. How Much Money Did Morpheus Research Make from Short Sales?
   The stock declines suggest significant profits for Morpheus Research, but no specific figures have been disclosed. How large were their short positions, and what profits did they realize from the 16% drop in SEI, 8.3% in BLZE, over 30% in ABL, and 5% in MFH? Were they paid by third parties to produce these reports?
5. Is Morpheus Research Colluding with Hedge Funds?
   Hindenburg Research’s ties with Anson Funds, evidenced by court documents showing alleged coordinated short selling, raise suspicions about Morpheus Research’s partnerships (Hindenburg Collusion). Are hedge funds like Anson Funds or others shorting these stocks alongside Morpheus Research, amplifying market impact?
6. Did Morpheus Research or Hindenburg Research Trade on Insider Information?
   Insider trading laws prohibit profiting from non-public information, with the SEC stating, “Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security” (SEC Insider Trading). Hindenburg Research’s 2024 SEBI notice alleged such practices for shorting Adani Group stocks (Hindenburg Closure). Did Morpheus Research use non-public information to establish short positions in SEI, BLZE, ABL, or MFH before publishing their reports? If proven, “the SEC or DOJ would come directly against anybody that profited,” raising the question: how is Morpheus Research any different from those prosecuted for insider trading?

Regulatory and Legal Context

Hindenburg Research faced significant scrutiny, including a 2024 SEBI show-cause notice for using non-public information to short Adani Group stocks and a 2021 DOJ investigation into short-selling practices (Hindenburg Closure). As of June 14, 2025, no SEC complaints have been filed against Morpheus Research, but its ties to Hindenburg Research and lack of transparency suggest potential regulatory risks. Ongoing investigations into BLZE and ABL, prompted by Morpheus Research’s reports, highlight the need for oversight. The US~ Observer’s investigation could spur regulatory scrutiny of Morpheus Research’s practices, protecting investors and companies from potential market manipulation.

Implications for Investors and Companies

Morpheus Research’s reports have caused significant financial and reputational harm to Solaris, Backblaze, Abacus, and Mercurity, with stock price declines ranging from 5% to over 30%. Investors face uncertainty, while companies struggle to counter allegations, as seen in Abacus’s refutation with independent valuations. The US~Observer’s commitment to “helping innocent victims of false charges and prosecution” offers hope for these companies, aligning with its mission to expose false allegations. By investigating Morpheus Research’s tactics, the US~Observer could uncover manipulative practices, restoring market confidence and supporting affected stakeholders.

Call for Transparency

The US~Observer’s ongoing investigation is critical to addressing the lack of transparency in Morpheus Research’s operations. Investors, regulators, and companies must demand disclosure of Morpheus Research’s funding sources, employee identities, and profit details. Independent audits and regulatory reviews are essential to verify the allegations against Solaris, Backblaze, Abacus, and Mercurity, ensuring fair market practices. The US~Observer’s efforts to expose false allegations could be a lifeline for these companies, helping them combat potentially unfounded claims and protect shareholder value.

Conclusion

The US~Observer’s investigative efforts, as highlighted in “Four Steps of Naked Short Selling,” position it as a potential savior for Solaris, Backblaze, Abacus, and Mercurity. By exposing false allegations and manipulative short selling, the US~Observer offers hope for restoring market integrity and protecting investors. The questions surrounding Morpheus Research’s funding, employees, report validity, profits, and potential insider trading demand urgent answers. The US~Observer’s commitment to uncovering the truth could be pivotal in ensuring fair markets and supporting companies unfairly targeted by short sellers.

Editor’s Note: It is clear that Morpheus Research has a vested interest in going after these companies publicly. If they were strictly a “research” organization any prudent person would expect them to share how they are being funded. If you have any information on Morpheus Research, Nathan “Nate” Anderson or Hindenburg Research call 541-474-7885.

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