Wild Oats Strewn

Who’s Who and What’s What at Whole Foods Market?

Would you buy your wild oats from a Yahoo named Rahodeb? What if he is a blogger named John Mackey, who also happens to be founder and CEO of Whole Foods Market?

According to “An Identity Crisis at Whole Foods Market“, as Rahodeb the anonymous Yahoo stock-market poster, he told the world that Whole Foods Is Hot, and Wild Oats is NOT. He did not tell the world that he, Rahodeb was the CEO of the Whole Foods Market that was hoping to purchase Wild Oats Market. His hopes recently came to fruition as the company of John Mackey, aka Rahodeb, recently agreed to buy Wild Oats for $565 million, or $18.50 a share.

Beginning in the late 1990s, Rahobed seems to have trolled the Internet with mischief in mind and corporate greed in his heart. In real life he was known as a Yogi and vegan Texas rancher. Are America’s consumers going to continue trusting their organic food purchases to someone who attempted to tarnish another food company’s good name and stock price? Are investors going to keep up the cash flow?

In January 2005, “Rahodeb” posted online “No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share. Would Whole Foods buy OATS? Almost surely not at current prices. What would they gain? OATS locations are too small.” Rahodeb speculated that Wild Oats would be sliding into bankruptcy or that its stock would fall below $5. A month later, he wrote that the Wild Oats management “doesn’t know what it is doing …. OATS has no value and no future.”

According to “Whole Foods Is Hot, Wild Oats a Dud — So Said ‘Rahodeb,’” for about eight years prior to the Whole Foods – Wild Oats agreement, Mr. Mackey posted numerous messages on Yahoo Finance stock forums using the pseudonym of Rahodeb, an anagram of his wife’s name. Rahodeb quickly became known as a cheerleader for Whole Foods stock. He was so anonymous, that he even spoke of himself in the third person. Expressing pride in the CEO’s work Rahodeb wrote in 2000, “While I’m not a ‘Mackey groupie, I do admire what the man has accomplished.” He cheered Whole Foods’ stock and bashed Wild Oats.

While praising his own company anonymously, Rahodeb socked it to the Wild Oats CEO, Perry Odak who had no idea who was behind the postings. “While Odak was trying to figure out the business and conducting expensive ‘research studies,’ to help him figure things out, Whole Foods was signing and opening large stores in OATS territories. Odak drove off most of the long-term OATS natural foods managers.

I admit to my bias. I love the company and I’m in for the long haul. I shop at Whole Foods. I own a great deal of its stock. I’m aligned with the mission and values of the company … Is there something wrong with this?” Perhaps the answer to Rahodeb’s question will be forthcoming as the Federal Trade Commission has initiated a lawsuit seeking to block the Wild Oats takeover on antitrust grounds.

One thing that seems to have resulted from John “Rahodeb” Mackey’s shenanigans is that stockholders and corporate boards across America are now forbidding their CEOs to go anywhere near the Internet. 😉

3 Responses to Wild Oats Strewn

  1. Jon H says:

    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

  2. Steve Bresnen says:

    Mr. Mackey’s conduct may have been stupid and boorish but can hardly be illegal. It is hard to imagine any reasonable investor would rely to his/her detriment on the comments of an obviously anonymous blogger in an on-line forum. The nature of the comments contains no great analysis or insight, much less insider information. Any diminution in the value of Whole Foods Market’s stock could only be caused by a momentary loss of confidence in its CEO; the fundamentals of the company and its universally recognized reformation of the grocery business remain unchanged and will sustain the company in the short and long run. Although I live in Austin, I have never met Mr. Mackey and don’t have investments in his or any related business. I am a shopper at the store with the top products, beyond any reasonable argument.

  3. wildgoats2 says:

    Odak deserved everything he got.

    That idiot ran wild oats into the ground. Destroying many, many careers and lives in the process.

    He will have a dark cloud to go with his dark personality everywhere he goes.

    Among the many policy mistakes:
    -“the tree of life disaster” where he tried to screw UNFI for Tree of Life. Lets just say he was crawling back to UNFI on his knees a year later.
    -his choice of executives were from conventional grocery companies who had no idea what it took to run a successful natural food operation.
    -Uniform policies were archaic in an industry where individual flair is very important to the work force. He didn’t know who his employees were.
    -Freezing 401 accounts this caused another brain drain making people think twice about investing in the company they worked for.
    -Lowering employee benefits and product discounts.
    -Employing draconian securities measures against workers requiring searches before people were allowed to leave. again a policy that did a lot of damage and was changed within a year.
    -Requiring gag orders to be signed in some cases giving up basic constitutional rights.
    -Cutting wages of everyone except the executives including himself. His bonuses were hundreds of thousands of dollars while long time employees were being offered 5 cent raises or no raise at all.

    He’s an idiot. I learned how not to run a company.

    I was also posting from within wild oats management, trying to blow the whistle on Odak and his mobsters.

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