Documents produced by Whole Foods Market in response to a lawsuit filed by the FTC have revealed that Whole Foods CEO John Mackey routinely posted anonymously to Internet stock boards, bashing competitor and acquisition target Wild Oats by name and stock symbol. The Whole Foods FTC lawsuit was filed in an effort to stop the takeover, asserting that it would be a violation of antitrust laws.
The discovery serves to illustrate just how easy and tempting it is to assume anonymity on the Internet and to use inside knowledge, hiding behind a pen name, to one’s own or one’s company’s advantage. It also highlights just how easy it is to delude yourself into thinking that the anonymity is impenetrable and everlasting.
Indeed, says Mackey, “I never intended any of those postings to be identified with me.”
Well, obviously.
In fact, Mackey whines, the FTC is raising his anonymous postings and quoting them simply “to embarrass both me and Whole Foods.”
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However Mackey’s Internet record would suggest otherwise. It turns out that Mackey had been posting anonymously for nearly 8 years, during which he apparently took every opportunity to bash competitor Wild Oats.
“The writing is on the wall,” Mackey wrote under his assumed name, Rahodeb (an anagram of his wife Deborah’s name). “The end game is now underway for OATS. Whole Foods is systematically destroying their viability as a business – market by market, city by city. Bankruptcy remains a distinct possibility for OATS IMO if the business isn’t sold within the next few years.”
Earlier Mackey / Rahodeb had written “The only thing time has told us about OATS is that it has lost $81 million in 19 years and $33 million over the last three years. The stock is up on takeover speculation and nothing else. The company still stinks and remains grossly overvalued based on very weak fundamentals. The stock is up now, but if it doesn’t get sold in the next year or so it is going to plummet back down. Wait and see.”
Ill-advised puffery? Or a blatant attempt to devalue the rival’s stock prior to an anticipated takeover bid?
Whole Foods announced in February of this year that it would be acquiring Wild Oats for $585 million, at $18.50 per Wild Oats share.
And Mackey didn’t save his spleen spilling for just the company itself. He appeared to delight in taking shots directly at his Wild Oats counterpart – Wild Oats CEO Perry Odak.
“While Odak was trying to figure out the business and conducting expensive ‘research studies’ to help him figure things out, Whole Foods was signing and opening large stores in OATS territories. Odak drove off most of the long-term OATS natural foods managers,” taunted Mackey in once such posting.
In another anonymous posting, Mackey posited, “Would Whole Foods buy OATS? Almost surely not at current prices. What would they gain? OATS locations are too small,” and in yet another took a shot at Wild Oats management, stateing that it “clearly doesn’t know what it is doing …. OATS has no value and no future.”
Now that this has come to light, there are messages piling up around the Internet in response, a bit of ironic turnabout…
“As a victim of anonymous attacks myself, I appreciate someone like this being exposed. This whole affair speaks to Mr. Mackay’s character. How much more would we all prefer it he had focused on a more positive form of competition? Does he not wish to be preferred by customers on the issues that matter to them?” opined one board reader.
Said another, “Mackey let the wheels fall off of something very essential – his persona as CEO of a high flying public company. Credibility now equals close to ZERO. At his level, it is not quite kosher to be disingenious [sic] towards industry peers and worse still from his position make masked “homer” comments.”
In the meantime, the Federal Trade Commission has had a response of its own – filing an antitrust lawsuit against Whole Foods, asserting that the takeover would reduce competition.
You can check out all of Mackay’s postings to the Yahoo stock boards, as Rahodeb, [Page no longer available – we have linked to the archive.org version instead].
P.S. The Whole Foods Board of Directors has now launched their own special investigation into Mr. Mackay’s shenanigans. Also, yesterday, it has been reported, Mackay apologized to Whole Foods’ stock holders with this statement on the company blog: “I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry [Ed. note: “…that I was caught…”] and I ask our stakeholders to please forgive me.” Interestingly, the link to the page titled “apology” is actually 404ing (cannot be found) on the site. Perhaps that is because, with both internal, FTC and, now we hear, SEC investigations going on, Whole Foods’ lawyers have determined it not best that he so publicly admit to his having done the deed.
Instead, there is this statement at the top of the company blog, which was maintained by Mackay:
“Dear Stakeholders,
A Special Committee of our Board of Directors’ is conducting an independent internal investigation into online financial message board postings related to Whole Foods Market and Wild Oats Markets. In light of this, it is in the best interest of the company to temporarily hold off on posting on my Company blog. The ability to post comments to this blog will be disabled during this time as well. I look forward to resuming our conversations and plan on being in touch with you again soon.
Best regards,
John”
But, of course, you can still post your comments here!
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