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Whole Foods CEO resumes blogging to explain past brouhaha

Heather Havenstein | May 8, 2008
John Mackey, who came under fire for using anonymous online posts to bash competitors, is back in the blogging saddle.

John Mackey, the chairman and CEO of Whole Foods Market who came under fire for using anonymous online posts to bash competitors, is back in the blogging saddle.

Mackey had been mum online since facing a storm of criticism last July when his eight-year practice of using the name "rahodeb" to anonymously post comments about his company on a Yahoo financial bulletin board came to light.

Last month, the Securities & Exchange said that an inquiry into Mackey's anonymous posting found no reason to penalize the company or its CEO.

With the inquiry closed, Mackey this month posted to his blog for the first time since the controversy. In November, the company had decided to ban company leaders from posting anything online about the company until the SEC concluded its investigation. In the new blog entry, Mackey explained that his anonymous posts allowed him to participate in a community as "just another unknown participant on equal terms" with all the other posters.

"What matters is the quality of what is said-not who says it," he noted. "I do not think that the virtue of transparency is particularly applicable or relevant when it comes to online communities whose custom is to participate through screen names. Within this context, I believed being consistent with the custom was more important than promoting the virtue of transparency as long as my information was accurate and my arguments well-reasoned."

He goes on to say that because the forum had a large community of Whole Foods Market "bashers and stock shorters" that he was prompted to defend the company. "Like any good parent, I wanted to defend my 'child' when it was being maligned and attacked unfairly, and I often came to its defense, wielding my debating skills as best I could," Mackey added.

Mackey asserted that he did not intend to denigrate Wild Oats, a competitor later acquired by Whole Foods. Most of his 1,400 posts were responses to other posts, he said. Mackey added that he rarely began online debates.

He also denied that he was trying to manipulate Wild Oats stock so his company could buy it more cheaply, noting that his last Yahoo post was in August 2006, while Whole Foods did not began talking about buying Wild Oats until January 2007.

"In addition, almost all of my posts that were critical of Wild Oats were made when its stock was far lower than the [US]$18.50 per share Whole Foods Market paid for it," he added. "The question assumes that someone named rahodeb posting on an online message board could actually hurt Wild Oats if he wanted to."

Mackey notes that his mistake was one of judgement, not ethics.


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