I was going to leave this story alone. I really was. I said to myself "Self," I said "You're better than this. You don't need to go there."
Of course, I rebutted myself with "Really? Then what about all that crap about Paris Hilton a couple of weeks ago?"
I had to admit, I had a point.
Anyway, this story has already been flogged all over the blogosphere, so I'll keep it short:
WSJ: Whole Foods Is Hot, Wild Oats a Dud -- So Said 'Rahodeb'
Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million, or $18.50 a share.
For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It's an anagram of Deborah, Mr. Mackey's wife's name. Rahodeb cheered Whole Foods' financial results, trumpeted his gains on the stock and bashed Wild Oats.
Even if Mr Mackey did not issue material non-public information, or make statements that impacted Whole Foods' stock price, his behavior, while not necessarily illegal, is definetely unethical, and probably incredibly thoughtless. You might even call it stupid.
For starters: Yahoo! Finance? Good God, that's the lowest of the low. I used to think that bulletin boards devoted to bodybuilding, powerlifting and other iron sports were full of bizarre, damaged personalities, until I took my first forray into browsing the world of internet stock boards. "Bedlam" doesn't even begin to cover it. I've ranted about this before, so I'll leave it there.
Secondly, as the officer of a publically traded company, Mr Mackey has a duty to shareholders to disseminate information through appropriate channels. If nothing else, hiding behind a pseudonym and cheerleading your own company to investors is sleazy as hell. No amount of circumlocution or fuzzy logic on his part can rationalize his way out of this.
Needless to say, the usual suspects in the blogosphere have all drawn the same parallel, comparing Mackey's behavior to that of Overstock.com's perennially surreal CEO, Patrick Byrne.
Long or Short Capital: The Patrick Byrne Award for Operational Focus and Excellence: Whole Foods CEO Rahodeb
I’m undecided if it’s a better or worse call than being a bat-crazy Quixote in public like Byrne. This is less ethical but more competent as as opposed to more ethical and less competent. But this is decidedley worse than not wearing a condom in Haiti, which is our standard threshold for management competence.
Dealbreaker: Only You Can Stop CEO Internet Addiction!
It's happened before. As Gary Weiss has shown, some chief executives simply cannot be trusted with the internet. If you are working in the IT department at a public company now, you might want to look into disconnecting your boss's internet connection. It's for his own good.
Gary Weiss: John Mackey, Patrick Byrne, and a Snoozing SEC
Mackey, it seems, posted anonymously on message boards to bash a competitor and boost the company's share price -- amazing behavior that came to light not because of an SEC enforcement action, on any number of possible grounds ranging from securities fraud to Regulation FD, but in a lawsuit by the Federal Trade Commission.
Of course, I rebutted myself with "Really? Then what about all that crap about Paris Hilton a couple of weeks ago?"
I had to admit, I had a point.
Anyway, this story has already been flogged all over the blogosphere, so I'll keep it short:
WSJ: Whole Foods Is Hot, Wild Oats a Dud -- So Said 'Rahodeb'
Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million, or $18.50 a share.
For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It's an anagram of Deborah, Mr. Mackey's wife's name. Rahodeb cheered Whole Foods' financial results, trumpeted his gains on the stock and bashed Wild Oats.
Even if Mr Mackey did not issue material non-public information, or make statements that impacted Whole Foods' stock price, his behavior, while not necessarily illegal, is definetely unethical, and probably incredibly thoughtless. You might even call it stupid.
For starters: Yahoo! Finance? Good God, that's the lowest of the low. I used to think that bulletin boards devoted to bodybuilding, powerlifting and other iron sports were full of bizarre, damaged personalities, until I took my first forray into browsing the world of internet stock boards. "Bedlam" doesn't even begin to cover it. I've ranted about this before, so I'll leave it there.
Secondly, as the officer of a publically traded company, Mr Mackey has a duty to shareholders to disseminate information through appropriate channels. If nothing else, hiding behind a pseudonym and cheerleading your own company to investors is sleazy as hell. No amount of circumlocution or fuzzy logic on his part can rationalize his way out of this.
Needless to say, the usual suspects in the blogosphere have all drawn the same parallel, comparing Mackey's behavior to that of Overstock.com's perennially surreal CEO, Patrick Byrne.
Long or Short Capital: The Patrick Byrne Award for Operational Focus and Excellence: Whole Foods CEO Rahodeb
I’m undecided if it’s a better or worse call than being a bat-crazy Quixote in public like Byrne. This is less ethical but more competent as as opposed to more ethical and less competent. But this is decidedley worse than not wearing a condom in Haiti, which is our standard threshold for management competence.
Dealbreaker: Only You Can Stop CEO Internet Addiction!
It's happened before. As Gary Weiss has shown, some chief executives simply cannot be trusted with the internet. If you are working in the IT department at a public company now, you might want to look into disconnecting your boss's internet connection. It's for his own good.
Gary Weiss: John Mackey, Patrick Byrne, and a Snoozing SEC
Mackey, it seems, posted anonymously on message boards to bash a competitor and boost the company's share price -- amazing behavior that came to light not because of an SEC enforcement action, on any number of possible grounds ranging from securities fraud to Regulation FD, but in a lawsuit by the Federal Trade Commission.
Gary Weiss seems especially indignant that the SEC seems to be uninterested in the unethical behavior of either Mackey or Weiss' favorite poster boy for bad governance, Patrick Byrne.
I will however go out on a limb and say that the Whole Foods story will diverge from the Overstock.com train wreck sooner rather than later. I forsee that John Mackey will be sent packing by his own board, under pressure from regulators and the media.
Why?
Because Whole Foods makes money. Because they're successful. Because there will be a lot of concerned parties on Wall Street with a vested interest in making sure that Whole Foods continues to succeed. Now that Mackey has shown what kind of thoughtless, half-cocked decision making he's capable of, he's a liability. Those concerned will want to have him ejected before he does something that scuttles the ship.
Compare that to OSTK, whose vested interests are limited solely to buy-and-hold investors who still believe in Santa Claus, and are still praying that one quarter, any quarter, their baby will show a profit. If your company was as beneath most people's radar as Overstock.com, you might resort to public temper tantrums to get attention too.
Anyway, Mackey will be crucified in the media, and will probably get the sack before the month is out. There, I said it.
2 comments:
That Mackey's behavior was irresponsible is without a doubt. Whether it was also criminal is the issue. Mackey deliberately used his anonymous attacks to hurt his competitor, and likely to drive down the value of a stock Whole Foods would try to acquire.
Will the blogosphere's defenders of transparency rush to condemn this unethical behavior by a supposedly "good guy company" with the same fervor that was directed against other larger corporations? Don't you think Wal-Mart's "flogging across America" was pretty tame by comparison?
What will blogs become when they grow up? Join the conversation at http://jon8332.typepad.com/force_for_good/2007/07/what-will-blogs.html
Jon Harmon
www.forceforgoodcom.com
Jon, thanks for contributing.
If you browse further through my work, you will see that I tirelessly pillory corporate decision making that is inept, poorly thought-out, or downright stupid.
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