The Nation: Whole Foods CEO Sows Wild Oats

[marmar]

Whole Foods CEO Sows Wild Oats
Matthew Blake



The August 16 federal district court ruling that allowed Whole Foods Market to acquire Wild Oats Market--which withstood appeal the following week--should come as no surprise. The Bush-era Federal Trade Commission has successfully stopped exactly one merger. The deal is still not technically done, as an FTC administrative law judge, separate from FTC antitrust lawyers, could still conceivably rule against the merger (at which point Whole Foods would then be the party issuing an appeal). But the core legal question of whether Whole Foods would monopolize the choices of fancy organic grocery-store shoppers was not what drew attention beyond Wall Street. What really grabbed the headlines was the bizarre, pseudonymous philosophizing of Whole Foods CEO John Mackey--and his rather conventional commitment to the bottom line, which belies the groovy, feel-good vibes pumped out from the company's PR machine.

Wide public interest in the planned merger was piqued in July when antitrust investigators discovered that for seven years Mackey had been posting comments on the Yahoo Finance Bulletin Board chat room under the name "Rahodeb" (an anagram of Deborah, his wife) that promoted himself and Whole Foods and frequently ridiculed Wild Oats. The Securities and Exchange Commission as well as the Whole Foods board has launched an investigation of the chat-room barbs. Mackey used the pseudonym to tell the world he had a cute haircut and that Whole Foods shoppers had outrageously cool tattoos and piercings. More pertinent to the proposed merger, "Rahodeb" had a habit of belittling Wild Oats whenever its stock rose. "Whole Foods says they will open 25 stores in OATS territories in the next 2 years," Mackey-as-Rahodeb wrote after a March 2006 Wild Oats stock jump. "The end game is now underway for OATS.... Whole Foods is systematically destroying their viability as a business--market by market, city by city."

Such comic-book malevolence exposed the megalomania of a CEO who had cultivated a maverick image. Mackey likes to tell reporters he is no longer interested in making money, and he frequently quotes Charles Darwin, Samuel Beckett and even the Talking Heads. Now, disgusted at the pseudonymous postings, many Whole Foods shareholders want him to leave the company or, at the very least, resign his second job as board chairman. "The legal questions are pretty hazy, but it's bizarre behavior at the minimum," says Mike Garland, whose Change to Win Investment Group has invested some of its members' pension funds in Whole Foods stock. "He spent hours of company time on these chat boards." The SEC will determine whether Mackey committed fraud. James Cox, a securities law professor at Duke University, told the San Francisco Chronicle that Mackey would most likely be charged with omitting material facts by obscuring his identity. He added that the SEC could make an example of him to deter other blogging CEOs from surreptitiously manipulating stock information. .....(more)

The complete piece is at: http://www.thenation.com/doc/20070910/blake

[Warpy]

1. There are two Wild Oats stores near me

but the Whole Paycheck is about 15 miles away, up in the ritzy, GOP part of town. Oh, I go there once in a blue moon because there's a great cooking supply store nearby, but I'm not that impressed, overall.

I was terrified the merger would go through and the Wild Oats stores would be closed. I go there to get things the food co-op doesn't stock, like my beloved King Arthur flour for baking bread.

I am delighted the merger failed. Since both Wild Oats stores are packed whenever I go, I doubt they are in serious danger from Whole Paycheck, barring the merger.

[TygrBright]

2. It didn't go through? I thought the appeal was denied and...

...all is tickety-boo for Whole Pocketbook.

Which is a damn' shame because the Wild Oats here in SF is way, WAY better.

sadly,
Bright