DISCUSSION

Whole Foods' John Mackey: 'For the sheer fun of arguing'

July 13, 2007Written by George Anderson

What was he thinking? That's the question that many were left asking after a Wall Street Journal report revealed that over an eight-year period, Whole Foods' CEO John Mackey went online to a Yahoo! stock market message board and anonymously touted his own company's prospects while ripping the competition.

Mr. Mackey, made the submissions under the name rahodeb, wrote in January 2005, "Would Whole Foods buy OATS? Almost surely not at current prices. What would they gain? OATS locations are too small."

Rahodeb, according to The Journal, said Wild Oats (selling for $8 a share at the time) would be sold after its stock tanked or the company was forced to file for bankruptcy protection. At one point, he wrote that management at Wild Oats "clearly doesn't know what it is doing... OATS has no value and no future."

Mr. Mackey had something to say about other competitors, as well.

"If you are waiting for Trader Joe's or Wegmans to slow down the Whole Foods express train you're going to be waiting the rest of your life. It ain't [going to] happen," he wrote in September 2005.

The Federal Trade Commission (FTC) obtained the postings from Whole Foods and is using rahodeb's comments to build its case against the grocery chain's acquisition of Wild Oats.

Mr. Mackey has denied any impropriety in his postings as rahodeb. He wrote on the Whole Foods website, "I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms."

He added: "The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn't. Sometimes I simply played 'devil's advocate' for the sheer fun of arguing. Anyone who knows me realizes that I frequently do this in person, too."

Mr. Mackey has asserted that his postings did not officially represent Whole Foods and he never disclosed proprietary information. He also cautioned about reading too much into anything he wrote. "All of rahodeb's postings should be read in the full context of the discussions that were taking place on the bulletin board at the time the postings were made. Reading them out of context may lead to serious misunderstandings."

The same postings, he said, should also not be assessed based on current market conditions but those that existed at the time. "Older postings mean far less today than they did when they were written."

Evidently, Mr. Mackey's personality was not particularly well hidden behind his rahodeb alias. A number of members in the Yahoo community outed Mr. Mackey and although he denied it throughout, he came clean on his final posting on Aug. 12, 2006.

"I've enjoyed my 8 years on this Board, but all things must come to an end. I wish everyone the very best... Whole Foods remains very strong and the stock will show continued strong growth over the long-term. Surgeon General and Boston Cowboy--you were both right about my true identity all along. Congratulations on your cleverness. Take care everyone. Goodbye."

Discussion Question: What do you make of John Mackey's rahodeb postings? Will the postings aid the FTC's case against Whole Foods' acquisition of Wild Oats?

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