Next time you're wondering who a basher might be

Whole Foods CEO Mackey Posted
Comments on Stock Message Board

In January 2005, someone using the name "Rahodeb" went online to a Yahoo stock-market forum and posted this opinion: 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?" Rahodeb asked, using Wild Oats' stock symbol. "Almost surely not at current prices. What would they gain? OATS locations are too small." Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock price dipped below $5. A month later, Rahodeb wrote that Wild Oats' management "clearly doesn't know what it is doing... OATS has no value and no future."

The comments were typical of the banter on Internet message boards for stocks -- but the identity of the writer was anything but. Rahodeb was the online pseudonym for John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million.

For about eight years until last August, Mr. Mackey posted voluminous messages on Yahoo's stock forums as Rahodeb, the company confirms. The moniker is an anagram for Deborah, which happens to be the name of Mr. Mackey's wife. Rahodeb routinely cheered Whole Foods' financial results, trumpeted his personal gains on the stock, and bashed Wild Oats.

Rahodeb even defended Mr. Mackey's haircut when another user poked fun at a photograph in Whole Foods' annual report. "I like Mackey's haircut," Rahodeb said. "I think he looks cute!"

Mr. Mackey's online alter ego came to light in a document made public late Tuesday by the Federal Trade Commission in its lawsuit seeking to block the Whole Foods-Wild Oats deal. The 45-page filing, submitted under seal when the lawsuit was filed in June, includes a quote from the Yahoo site in which Mr. Mackey said "the writing is on the wall" for Wild Oats. An FTC footnote said, "As here, Mr. Mackey often posted to Internet sites pseudonymously, often using the name Rahodeb."

Whole Foods didn't authenticate each and every one of Rahodeb's postings as being from Mr. Mackey, who declined to be interviewed. However, the company said in a statement that among millions of documents the company gave the FTC were postings Mr. Mackey made 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." The statement said, "Many of the opinions expressed in these postings now have far less relevance than when they were written." A spokeswoman for Wild Oats declined to comment.

Mr. Mackey, a 53-year-old vegan, co-founded Whole Foods in 1980. He built the Austin, Texas, company into the world's largest organic and natural-foods grocer, in part by acquiring many smaller chains. Like Whole Foods itself, Mr. Mackey is unconventional. He slashed his annual salary to $1 starting last January, explaining later that "this is what my heart is telling me is the appropriate thing to do right now." Outspoken and opinionated, he writes his own blog on the company's Web site. (Read the blog.)

READ RAHODEB'S COMMENTS

• Rahodeb's farewell comment to the Yahoo message board for Whole Foods stock in August 2006:
http://tinyurl.com/24vtow

• In the following entry, Rahodeb says the fundamentals of Wild Oats shares haven't improved and that its stock price had risen merely because of speculation of a buyout:
http://tinyurl.com/267oc7

• In the following dispatch, Rahodeb lambastes a Yahoo user who claimed Wild Oats had been a takeover target at $14 to $16 a share:
http://tinyurl.com/23el99

• In this entry, Rahodeb predicts that Whole Foods shares will one day trade at more than $800:
http://tinyurl.com/2bz3ow

• In the following, Rahodeb claims Whole Foods shares are undervalued and Wild Oats is overvalued:
http://tinyurl.com/2hrrkt

Note: Whole Foods didn't authenticate each and every one of Rahodeb's postings as being from Mr. Mackey. But the company and Mr. Mackey confirmed that he made numerous postings under the name Rahodeb from 1999 to 2006.

MORE

• Whole Foods confirms that John Mackey used an alias in making comments about the company's stock on Yahoo's Web site:
http://www.wholefoodsmarket.com/ftchearingupdates/faq.html

• A link to John Mackey's blog:
http://www.wholefoodsmarket.com/blogs/jm/

• Read the full text of the FTC complaint and the FTC document released July 10.

• Whole Foods CEO Has Heated Words for FTC
06/27/2007

• CEO's Words May Cook Whole Foods
06/20/2007

Whole Foods agreed in February to acquire Wild Oats, of Boulder, Colo., for $18.50 a share. The FTC sued to block the deal on antitrust grounds in U.S. District Court in Washington, D.C., saying the combination would reduce competition and raise prices for consumers.

To buttress its case, the FTC is trying to use Mr. Mackey's words against him. In its lawsuit, it quoted Mr. Mackey informing other Whole Foods board members that buying Wild Oats would enable the company to "avoid nasty price wars" in several markets and reduce the chance that a big conventional grocer like Kroger Co. would create a competing national natural-foods retailer.

When that part of the FTC's suit became public, Mr. Mackey fired back at the agency with a 14,000-word treatise on his blog. He accused the government of "bullying tactics," failing to do its homework, and taking out of context "macho posturing" by executives that is common to competitive organizations.

Rahodeb began posting messages about Whole Foods shares on Yahoo.com in the late 1990s. He quickly gained a reputation as being one of the stock's biggest cheerleaders, and gamely defended himself when other posters chastised him for being too rosy. "I've never pretended to be anything but enthusiastic about WFMI," he wrote in 2000, using Whole Foods' stock symbol. "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?"

Rahodeb often expressed pride in the work of Mr. Mackey. "While I'm not a 'Mackey groupie,' " he wrote in 2000, "I do admire what the man has accomplished -- building a $1.6 billion business from scratch is quite an achievement." He then asked another user, "whtmewrry 99," what he or she had accomplished by comparison. (The poster doesn't appear to have replied.)

By 2005, Whole Foods had grown to more than 160 stores and its annual sales were $4 billion, making it the leading player in the natural and organic foods sector. In a message in January of that year, Rahodeb predicted great things for Whole Foods' stock. "13 years from now Whole Foods will be a $800+ stock before splits," he wrote. "Whole Foods is a tremendous growth stock." At the time, the shares traded at about $94. Whole Foods' shares closed yesterday at $39.50, up $1.03, or 2.68%.

Rahodeb often sparred with other users, deploying a rigorous analysis of financial statements. "Your quarterly cash flow variance isn't statistically meaningful because the time period is too short," he complained to another user who had criticized Whole Foods in March 2006. He then pasted a summary of the previous six years of Whole Foods' operating cash flow. "Over the past 5 years operating cash flow has increased 330%," Rahodeb noted.

When it came to Wild Oats, Whole Foods' main rival, Rahodeb didn't pull punches. He often criticized Perry Odak, Wild Oats' former CEO, who resigned last year. "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," Rahodeb wrote in 2005. "Odak drove off most of the long-term OATS natural foods managers" and brought in executives who "didn't know too much about the natural/organics industry or their customers."

Mr. Odak, in a telephone interview, said he was aware of critical postings, but had no idea Mr. Mackey might have been behind them. "It doesn't surprise me," he added.

When on occasion Rahodeb went without posting for several weeks, some users expressed concern about his whereabouts. On at least one occasion, he reassured them that he'd been away but was keeping abreast of the chat.

Last August, Rahodeb filed his last dispatch on the Whole Foods message board. He said he'd lost a bet with "hubris12000" about Whole Foods' stock performance; the terms of the bet required that he stop posting. He blamed the whims of the stock market for a 40% decline in the company's shares.

"Whole Foods itself has a very bright future, and I will continue to hold my stock for a very long time," he wrote. "I've enjoyed my 8 years on this Board, but all things must come to an end. I wish everyone the very best. Hog152-keep the faith. Liberfar-good luck with your market-timing game. Hubris12000-take your profits while you can."