"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." - Warren Buffett
John Mackey, CEO of Whole Foods, spent more than EIGHT YEARS bashing his company's biggest competitor, Wild Oats, posting comments to a very popular online forum that tracks publicly traded companies. And here's the catch, he did it anonymously, using the pseudonym "Rahodeb" (a variation of his wife's name, Deborah). How many different comments do you think you could post in eight years? In Mackey's case: 1,394.
(read "Rahodeb's" 1,394 posts by clicking here)
Eight years worth of online bashing, arguing against, speculating about, and trashing his biggest competitor. A competitor that really posed little to no challenge to his very successful company. 1,394 times. Wow. That is real commitment. (cue sounds of cuckoo birds....NOW)
Wild Oats recently agreed to be acquired by Whole Foods. Suddenly this is an attractive company to Mackey... Why would he spend so much time bashing a company that he wanted to buy? My guess is that, initially, he was just trying to hurt the competition any way he could. Albeit in a weak, cowardly way - especially for the CEO. But, as others began speculating that Wild Oats was a takeover target (Mackey included, as he pushed that notion on the message board), perhaps he saw an opportunity to try and persuade OATS investors to sell, thus lowering the price of its stock and making it cheaper and easier for Whole Foods to acquire. Not only is this cowardly, it is completely ineffective (you are basically talking to day traders who have about as much success as Mackey at influencing stock prices of companies they bash on the boards). But that's not the issue.
One would think that an educated, successful CEO would have better things to do with his time, much less know that his anonymous posting of negative comments to an online investor forum about the competition (or his own company) is not only completely ineffective - it could very well be illegal.
Of course, now that his exploits have been revealed, he suddenly has nothing to say. He probably thought he would never get caught. (Note: you are never anonymous online) So, for now, we can only guess at what drove him to do this, so often, and for so long. Especially as other CEOs have gone under the microscope for bad behavior by Boards of Directors and State and Federal Government offices in recent years.
This comes at a bad time (is there ever a good time?) for Whole Foods, who has become the corporate world's poster child for successful retail growth while maintaining a positive image. They have earned a powerful, positive reputation as a provider of high-quality, healthy foods and products in a world that is growing increasingly afraid of pesticides, carbon footprints, genetic engineering, surpressing small farmers, and not buying local. They pride themselves on having strong ethics, which they say is evidenced by working with local growers, supporting fair trade, selling only organic meats and produce, etc. Ethics, fairness and quality are the foundation of their brand, that invaluable essence that defines a company in the mind of its customers and shareholders.
Were his actions illegal? I don't know, but I do know this - they were completely unethical and unfair, and that hurts the very core of the company's brand. The CEO is the human embodiment of the company, and therefore the first and loudest champion of the brand, and the protector of its reputation. Mackey needs to be fired, and pronto. The longer he stays, the more the Whole Foods brands will tarnish, and the faster the company will lose the reputation it spent so many years developing, which drives their success today. And they could lose the Wild Oats deal.
If their leader is capable of something like this, and Whole Foods deemed it fit to keep him on board, why would I want to continue shopping there? And, if that's not enough for shareholders - why would the FTC allow them to acquire OATS?