When CEOs blog badly

Remember John Mackey of Whole Foods, the renegade CEO blogger? Turns out he's been a presence on the Internet for awhile, and some of it is coming back to bite him.

Whole Foods Market Chief Executive Officer John Mackey criticized Wild Oats Markets in anonymous messages on the Internet in the years before his company agreed to take over the smaller rival.

The comments were posted at online financial chat boards hosted by Yahoo under the user name "rahodeb" from 1999 to mid-2006, Mackey said Wednesday in an e-mailed statement.

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 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."

Wild Oats "has lost their way and no longer has a sense of mission or even a well thought out theory of the business," rahodeb wrote in a post on Yahoo's Whole Foods message board dated March 28, 2006. "They are floundering around hoping to find a viable strategy that may stop their erosion."

Rahodeb, an anagram of Deborah, the name of Mackey's wife, even defended Mackey's haircut when another user poked fun at a photo in the annual report, the Journal reported. "I like Mackey's haircut," rahodeb said. "I think he looks cute!"

[...]

For an executive to use a pseudonym to praise his company and stock "isn't per se unlawful, but it's dicey," Harvey Pitt, a former Securities and Exchange Commission chairman, told The Wall Street Journal.

Told of the Mackey posts, "It's clear that he is trying to influence people's views and the stock price, and if anything is inaccurate or selectively disclosed he would indeed be violating the law.

"At a minimum, it's bizarre and ill-advised, even if it isn't illegal," Pitt told the Journal.

It's called being a sock puppet, and it's never pretty. I mean, look. It's still possible to be anonymous on the Internet, but the more you're out there making self-serving statements, especially ones that are harmful to others, the more likely that someone is going to be motivated enough to try and put a real name to whatever handle you're using. And if you're an insider of some kind, posting stuff that only an insider could know, I guarantee that someone will figure out who you are. It's really not that hard.

But honestly, someone in a position of prominence should never make public statements under any name other than his or her own. Either speak officially or listen to your lawyers and shut the hell up. All other ways eventually end in sorrow. As I'm sure John Mackey will now realize.

Posted by Charles Kuffner on July 13, 2007 to Bidness