As if Whole Foods’ proposed acquisition of Wild Oats weren’t already in enough trouble, the Wall Street Journal reports today that Whole Foods chief executive John Mackey pseudonymously posted messages on Yahoo discussion groups about the wonderfulness of Whole Foods, the lagging fortunes of Wild Oats and his own all-around genius.
Using the name “Rahodeb” (“Deborah,” his wife’s name, backwards jumbled up), Mackey apparently tried to drive down Wild Oats’ stock price in 2005 when it was $8 a share. Journal reporters David Kesmodel and John R. Wilke write:
“Would Whole Foods buy OATS?” Rahodeb asked, using Wild Oats’ stock symbol. “Almost surely not at current prices. What would they gain? OATS locations are too small.” Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management “clearly doesn’t know what it is doing …. OATS has no value and no future.”
No wonder the Federal Trade Commission is all over this — there’s no way the agency could ignore such behavior. And Mackey’s contention that he was engaging in meaningless “macho posturing” is ridiculous.
Update: The New York Times account is worth a read, too.
5 thoughts on “A weird twist in the Whole Foods saga”
That’s pretty bizarre – what kind of exec has time for this?That being said, when Wild Oat’s bought the Nature’s markets, the service, quality, and employee relations all went down.
One more reason not to shop there.Does anyone else think that at this very minute the Trader Joe’s marketing department is polishing a “Our CEO only uses the internet to post karaoke videos on YouTube” campaign?
Whatever else is true about this weird saga, we can agree on this: Rahodeb is not Deborah spelled backwards.
Ha, ha! And I’m not even dyslexic. Now fixed.
Via The Telegraph: Former Securities and Exchange Commission chairman Harvey Pitt, said it depended on whether any disclosure rules had been breached. He added that “at a minimum, it’s bizarre and ill-advised, even if it isn’t illegal”.How isn’t this illegal? You’ve got a CEO making “forward-looking statements,” the kind that always come with disclaimers, while posting under an anonymous name and cheerleading the stock, also known as pumping.If this isn’t illegal, I’d hope it would be by next week. Instead of honesty and integrity, we get anonymity?
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