My husband usually has business news on as background noise, and yesterday morning, my ears pricked up when I heard the newspeople commenting on a less than wholesome practice that the CEO of Whole Foods was caught out on.
It seems that John Mackey, Whole Foods CEO and founder, has been anonymously commenting on a Yahoo stock market forum, plumping for Whole Foods and trashing Wild Oats (a rival "natural foods" chain). Using the nom de Yahoo of "rahodeb", an anagram of his wife Deborah's name. Clearly he was not trying to disguise himself all that cleverly. You'd think he could at least have come up with a better anagram. Sometime like ORB HEAD or DEAR HOB.
Mackey posted for a period of some eight years. He only ceased and desisted when he lost a bet with a fellow poster.
Awareness of Mackey's online alter ego came about because not only are Whole Foods and Wild Oats rivals, Wild Oats is a takeover target for Whole Foods.
The FTC no like this deal, claiming it will create an natural natural foods monopoly for Whole Foods. Part of the FTC's suit to stop the takeover sites comments made by Mackey/rahodeb.
It's not clear that Mackey did anything illegal. He apparently didn't use insider information.
But what are we to make of "anonymous" comments that touted Whole Foods and dissed Wild Oats?
One might think that the CEO might understandably have wanted to keep Whole Foods' price up.
One might think that the CEO might understandably have wanted to keep Wild Oats' price down.
That would explain speculation on Rahodeb's part that Wild Oats might be slip-sliding in to bankruptcy. Or that it had incompetent management. Or that it's fundamentals aren't fundamentally sound.
(It does not account for the comment also attributed to Rahodeb that Mackey's hairdo was "cute." Maybe he was just channeling his wife on that one. Can't blame a guy for trying.)
Once outed, Mackey claimed that the FTC is just trying to make him look bad. (Wasn't too hard, now, was it?)
He also said [in a posting on his web site]: "I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms." He said that "I never intended any of those postings to be identified with me."
I can certainly imagine that he never intended for "those posting" to be identified with me. (And why am I now channeling Bill Clinton? I guess it all depends on the meaning of the word 'those.')
Caveat emptor to anyone who gets their stock advice on Yahoo. Sure, there's a lot of honest back-and-forth. But there are also a lot of yahoos - long boosters and short-sellers - out there trying to convince naifs to buy deer and sell sheep. Yahoo! alright.
So what has Mackey done here - legalities aside?
- He's embarrassed himself.
- He's made himself look stunningly duplicitous and untrustworthy.
- He's embarrassed his company.
- He's no doubt ticked off at least some of his shareholders.
- He's put the deal to acquire Wild Oats at greater risk.
Shouldn't he have known better? Come on, already. John Mackey is a vegan - no egg yoke or sour milk curdled his judgement. No Mad Cow disease addled this brain. Certainly, there can be no thought of a Twinkie defense. (Let's face it, most Whole Foods desserts taste more like desert. No two ways about it, carob just can't hold a bean to real chocolate.)
No, this whole episode casts a big ethical cloud over John Mackey and Whole Foods.
This is a company that worries about the worklives of chickens and pigs. That won't stock lobsters because the poor bastards might feel the pain of boiling water.
Surely, John Mackey must have had some inkling that trash-talking the competition in the name of 'rahodeb' was going to come back to haunt him like a tainted meal.
10 comments:
Mackey's fall from grace just goes to show, yet again, that transparency is the name of the game, particular in this social media world.
Post/comment in your own name, or if you're posting on behalf of your company, in your company's name.
Posting anonymously or under a cute pen name is going to come back to bite you in the butt in the end. Think John Mackey realizes that now?
--Bryan Person
The Monster Blog
I heard the iPhone causes cancer. Also, having two buttons on your mouse decreases the risk of carpel tunnel by over 84%. Seriously.
There are many reasons to use a nom on the big public boards, but someone who is the CEO of a public company trash-talking the competition under a lame-o name-o really takes the cake (and, of course that would be an oh-so-tempting vegan cake, wouldn't it?)
What a nincompoop! Usually the guys who do this sort of thing are scam-meisters trying to tout pink sheet and penny stocks.
And, of course, if it had been some worker bee down in the ranks who did this, I am sure Mackey would find it slightly less than cute.
Kathleen
Kathleen
Mackey's anonymous posting about Whole Foods and its competitors seems worse to people who aren't aware of how little credence is given every Yahoo stock market message poster. I've posted many thousands of messages there over the last ten years, concerning dozens of stocks, under a variety of posting names, so I am familiar with the environment. Remember the old cartoon with the punchline "On the internet, no one knows you're a dog."? That is the way it is on the Yahoo stock threads. No one ever claims to have "inside information", because that could get them in trouble. But they all claim to understand the company's position much better than those with the opposite viewpoint, who are always morons, idiots, and, as it is typically spelled there, "loosers". The chances that Mackey's posts influenced the prices of either his own stock or that of Wild Oats for more than a penny or two for a day or two are pretty slim. This is a fuss over appearances, not substance. Had anyone known that it was actually the CEO posting, they might have taken his posts more seriously, but they didn't, so he was just another anonymous "looser" to most of the people reading whatever it was that he wrote.
You might ask, if I think no one cares about the substance of posts, why do I bother? Well, I just like to argue with people, and sometimes I haven't thought through all my opinions until I write them. That's also why people blog, right?
Well, regardless of whether or not he was successful, he DID try to manipulate the value of two companies stock. Such manipulation is illegal for most people. (the brokers during the dot.com bubble are an exception to that, and a good example of why there should be no exceptions). Honest opinions are not illegal, but were his opinions honest? He stated Whole foods would never want to buy Wild Oats at their $8 price, when in fact they were in the process of doing just that and he KNEW it... Sounds pretty illegal to me.
And while he may have not posted inside information, he was operating on inside information. He was aware that a takeover was in progress, and he was very much on the inside. That fact puts a faster spin on the whole manipulation issue.
Sure, he may have not done much harm... But he did try, and it's the thought that counts!
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John Mackey is tricky guy! These limited companies have irregularities!! But all companies have something rare! For me..
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