Whole Foods CEO Attacked Rival Online
The chief executive of Whole Foods Market Inc. wrote anonymous online attacks against a smaller rival and questioned why anyone would buy its stock, before Whole Foods announced an offer to buy the other company this year.
The postings on Internet financial forums, made under the name "rahodeb," said Wild Oats Markets Inc. stock was overpriced. The statements predicted the company would fall into bankruptcy and then be sold after its stock fell below $5 per share.
In February, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share.
The company acknowledged that the postings by "rahodeb" were written by CEO John Mackey.
They were made public this week as part of a lawsuit by the Federal Trade Commission to block Whole Foods from buying Wild Oats on antitrust grounds. Regulators say the sale would combine the two largest organic and natural foods retailers and raise prices for consumers by concentrating too much power in one company.
Austin-based Whole Foods defended Mackey's postings, saying they were being taken out of context years later.
"Mr. Mackey made those postings from 1999 to 2006 under an alias to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks," Whole Foods said.
The company added that many of Mackey's opinions in the postings "now have far less relevance than when they were written. In addition, like most people, Mr. Mackey's opinion about some things has changed over time."
Whole Foods concluded by saying the comments were Mackey's, not those of the company.
One posting, from January 2005, questioned why anyone would buy shares of Wild Oats at their price then of about $8 each, The Wall Street Journal reported.
"Would Whole Foods buy (Wild Oats)? Almost surely not at current prices," rahodeb wrote. "What would they gain? (Their) locations are too small."
Rahodeb also said Boulder, Colo.-based Wild Oats' management "clearly doesn't know what it is doing." The company, he wrote, "has no value and no future."
Mackey has led an unusually public countercharge to the FTC's attempt to block his company's purchase of Wild Oats. He has said both companies compete in a much larger market because many traditional grocers now sell organic and natural foods.
Mackey used the blog on his company's Web site recently to bash the FTC. He ridiculed the FTC's reasoning that it needed to stop Whole Foods from eliminating a competitor. If that were the case, he said, the FTC should never permit any mergers because they necessarily remove a rival from the marketplace.
The blog broadside by Mackey came after the FTC moved to release sealed documents which quoted the CEO telling Whole Foods directors that buying Wild Oats would help the company "avoid nasty price wars" and block a bigger retailer from building a national natural-foods chain.
The FTC lawsuit is pending in U.S. District Court in Washington.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. The postings on Internet financial forums, made under the name "rahodeb," said Wild Oats Markets Inc. stock was overpriced. The statements predicted the company would fall into bankruptcy and then be sold after its stock fell below $5 per share.
In February, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share.
The company acknowledged that the postings by "rahodeb" were written by CEO John Mackey.
They were made public this week as part of a lawsuit by the Federal Trade Commission to block Whole Foods from buying Wild Oats on antitrust grounds. Regulators say the sale would combine the two largest organic and natural foods retailers and raise prices for consumers by concentrating too much power in one company.
Austin-based Whole Foods defended Mackey's postings, saying they were being taken out of context years later.
"Mr. Mackey made those postings from 1999 to 2006 under an alias to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks," Whole Foods said.
The company added that many of Mackey's opinions in the postings "now have far less relevance than when they were written. In addition, like most people, Mr. Mackey's opinion about some things has changed over time."
Whole Foods concluded by saying the comments were Mackey's, not those of the company.
One posting, from January 2005, questioned why anyone would buy shares of Wild Oats at their price then of about $8 each, The Wall Street Journal reported.
"Would Whole Foods buy (Wild Oats)? Almost surely not at current prices," rahodeb wrote. "What would they gain? (Their) locations are too small."
Rahodeb also said Boulder, Colo.-based Wild Oats' management "clearly doesn't know what it is doing." The company, he wrote, "has no value and no future."
Mackey has led an unusually public countercharge to the FTC's attempt to block his company's purchase of Wild Oats. He has said both companies compete in a much larger market because many traditional grocers now sell organic and natural foods.
Mackey used the blog on his company's Web site recently to bash the FTC. He ridiculed the FTC's reasoning that it needed to stop Whole Foods from eliminating a competitor. If that were the case, he said, the FTC should never permit any mergers because they necessarily remove a rival from the marketplace.
The blog broadside by Mackey came after the FTC moved to release sealed documents which quoted the CEO telling Whole Foods directors that buying Wild Oats would help the company "avoid nasty price wars" and block a bigger retailer from building a national natural-foods chain.
The FTC lawsuit is pending in U.S. District Court in Washington.
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As someone who has written an award-winning book about why ethical companies are more likely to succeed (Principled Profit: Marketing That Puts People First) and who founded a movement called the Business Ethics Pledge http://www.business-ethics-pledge.org , I'm of the opinion--based on research--that strong ethics helps a company succeed.
Anonymous attempts to drive down the stock price of a company you're considering buying down the road is the antithesis of ethical behavior. And worse,the radio story where I first learned about this claimed Mackey did it because it was "fun."
If this is an America that values honesty, the FTC should deny the merger based solely on Mackey's sneak attack.
Shel Horowitz - Marketing Strategic Planning, Consulting, and Copywriting
focused on Ethical, Affordable, Effective Approaches - http://www.frugalmarketing.com
Sign the Ethics Pledge: http://www.business-ethics-pledge.org
As someone who has written an award-winning book about why ethical companies are more likely to succeed (Principled Profit: Marketing That Puts People First) and who founded a movement called the Business Ethics Pledge http://www.business-ethics-pledge.org , I'm of the opinion--based on research--that strong ethics helps a company succeed.
Anonymous attempts to drive down the stock price of a company you're considering buying down the road is the antithesis of ethical behavior. And worse,the radio story where I first learned about this claimed Mackey did it because it was "fun."
If this is an America that values honesty, the FTC should deny the merger based solely on Mackey's sneak attack.
Shel Horowitz - Marketing Strategic Planning, Consulting, and Copywriting
focused on Ethical, Affordable, Effective Approaches - http://www.frugalmarketing.com
Sign the Ethics Pledge: http://www.business-ethics-pledge.org
As someone who has written an award-winning book about why ethical companies are more likely to succeed (Principled Profit: Marketing That Puts People First) and who founded a movement called the Business Ethics Pledge http://www.business-ethics-pledge.org , I'm of the opinion--based on research--that strong ethics helps a company succeed.
Anonymous attempts to drive down the stock price of a company you're considering buying down the road is the antithesis of ethical behavior. And worse,the radio story where I first learned about this claimed Mackey did it because it was "fun."
If this is an America that values honesty, the FTC should deny the merger based solely on Mackey's sneak attack.
Shel Horowitz - Marketing Strategic Planning, Consulting, and Copywriting
focused on Ethical, Affordable, Effective Approaches - http://www.frugalmarketing.com
Sign the Ethics Pledge: http://www.business-ethics-pledge.org
This underhanded tactics used by the subject in this news piece explains itself. Also, the Fed has been concerned about the food industry for many, many years. There is nothing "all of a sudden" about the Feds concern of the food industry.
Allow me to suggest the following in language that your kindergarten teacher would have used with you to try to get this suggestion down to your present level of thought.
Before you post, first "put on your thinking cap" when you read the article. Perhaps then you'll be capable of writing a relevant post.
Omega39's question regarding mergers of banks and oil companies is totally relevant, though your reply is a bit psycho. I must admit your crack about the fed concern for the food industry is hysterical. You jest! (GMO, BVH, Chinese imports ha, ha, ha!)
WE should all be able to post without being attacked by the likes of you. Please go back to kindergarten and learn how to get along.
Get a grip Francis.
Posted by Canaima
Canaima, you are obviously a Bush boot licker who refuses to admit that any FTC oversight that may interfere with campaign funds to Republican coffers is sorely lacking. Most Americans who shop at health food stores could care less if they shop at Wild oats or Whole foods. On the other hand, when gas is hovering at above $3/gal because mergers in the oil industry have reduced competition to a handful of companies, that impacts everyone.
Posted by kirstinharr at 11:16 AM : Jul 12, 2007
That may be but the tactics say repug values all over them, remember a former hill staffer said%u2026.