John Mackey, the vegan pulling down $1 a year as head of $5.7 billion company Whole Foods, the organic/natural/crunchy/gourmet chain, is taking a lot of FTC anti-trust-flavored heat for posting anonymously — for years — on a Yahoo investing forum about his company’s own stock. Besides routing for the home team under screen name Rahodeb (Mrs. Mackey, don’t you feel flattered?), Mackey also talked a heck of a lot of smack about competitor Wild Oats, the Wall Street Journal reported yesterday in a front page story.
It gets a little more complicated: Whole Foods has found itself embroiled in an antitrust case for trying to merge with Wild Oats, that same company Mackey had described as “floundering” and a whole lot of other things in previous months online.
Oh, John. Couldn’t you have just deployed a PR peon to sing your praises on the silly message board?
Despite the odd revelation yesterday, Whole Foods’ stock picked up a little over 3.5 percent today on NASDAQ.
At first glance, this might look like a woefully regrettable mistake on Mackey’s part. At minimum, it’s certainly embarrassing, and at worst, it could help kill the deal with Wild Oats.
But on closer look, it’s a very nuanced case, and the implications aren’t clear. Mackey posted information and opinions about his and other businesses, but all of his posts were anonymous (though some on the boards suspected his identity).
It’s certainly a faux pas, but does what Mackey did count as foul play, or was it merely “fun,” as he describes it?
One ABC reporter thinks it smells like deception, and compared the Mackey gaffe with last year’s controversy over the Wal-Mart fan blog that was exposed to have been funded by Wal-Mart’s very own PR firm, Edelman. But is it really a fair comparison? When you put the Wal-Mart case next to Mackey’s furtive forum posts, I think there’s something a lot more sneaky to me about a big PR firm secretly backing what’s made to look like a homegrown website.
The jury on the FTC case will be out for a while, which means we’ve got some time to render our own judgments. (Whatever happens, Mr. Mackey, I love those free fruit samples at my store in Chelsea – keep ’em coming.)
UPDATE: Mackey’s sorry.