Velo3D Inc (NASDAQ: VELO) shares declined 8.5% on Thursday following a report from short-seller Morpheus Research that leveled multiple allegations against the company and its chief executive, Dr. Arun Jeldi. The firm disclosed it holds a short position in Velo3D and said its investigation raises questions about both leadership claims and the company’s commercial prospects.
Morpheus said Dr. Jeldi "parlayed a failed SPAC and a sham SpaceX relationship into a fortune," and it alleged that the CEO "appears to have fabricated virtually every aspect of his background," including assertions that he is a doctor and the builder of several companies. The short-seller also said it obtained police reports indicating Dr. Jeldi’s brother, Bala Jeldi, reportedly tried to flee India after defrauding creditors.
The report questioned the strength of Velo3D’s ties to SpaceX, noting the company’s stock had rallied roughly 140% over the past year on the back of a strategic pivot toward aerospace and defense and on statements pointing to a relationship with SpaceX. Morpheus cited interviews with multiple former Velo3D employees who told the firm that the SpaceX relationship has been "effectively dead" since 2024, despite CEO Jeldi’s public claims that SpaceX is enlarging its fleet and purchasing parts from Velo3D. Morpheus added that its review of SEC disclosures supports its view of limited recent activity.
The short-seller also raised questions about Velo3D’s defense pipeline. It noted that several government contracts with the Department of Defense show zero or minimal dollars obligated and said former employees suggested that prominent defense customers such as Lockheed Martin have abandoned Velo3D. Those points were presented as part of Morpheus’s argument that expected defense-sector revenue may be smaller or slower to materialize than the market has priced in.
On the technology front, Morpheus quoted industry experts who challenged CEO Jeldi’s public assertions about Velo3D’s capabilities. The firm said those experts highlighted reliability issues and low machine uptimes. In its valuation critique, Morpheus pointed out that Velo3D trades at 10.7 times price-to-sales, which it described as a premium of 858% relative to peer valuations, even as the company has reported consistent losses and experienced six consecutive quarters of flat revenue growth.
Finally, the report drew attention to an apparent personal financial move: it said CEO Jeldi has pledged $54 million worth of shares as collateral for a private loan. Morpheus presented this alongside other points as part of its rationale for taking a short position in Velo3D.
Context and market reaction
Following the release of the Morpheus report and its disclosed short position, Velo3D shares moved lower on the session. The allegations address leadership credentials, customer relationships in aerospace and defense, contract funding levels with government agencies, product reliability, revenue trends, valuation metrics, and insider share pledges.
Where available, Morpheus said it relied on interviews with former employees, public SEC disclosures, police reports, and commentary from industry experts to support its case. The report frames these items as reasons the market may be overestimating Velo3D’s near-term commercial traction and long-term growth potential.
Readers should note the information presented here reflects the claims and analysis disclosed by the short-seller and referenced sources cited by that firm.