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Kai Ryssdal: There’s an unusual twist today in what was shaping up to be a fairly routine anti-trust case. The Federal Trade Commission’s been trying to block the organic grocery chain Whole Foods from buying its smaller rival, Wild Oats.
We learned this morning the FTC may have the ammunition it needs to do that. Turns out the CEO of Whole Foods has been quite vocal on an anonymous Internet chat site. Marketplace’s Sam Eaton explains.
Sam Eaton: It turns out John Mackey, the colorful cofounder and CEO of Whole Foods, had a fondness for online chatter. Not only does Mackey post regular entries on his company blog, but up until last year, he was also a frequent visitor to Yahoo’s financial chat boards.
Mackey used the pseudonym “rahodeb,” a variation of his wife’s name, Deborah.
Jacob Frenkel: The mere using of a pseudonym is not a violation of law.
Former Securities and Exchange Commission lawyer Jacob Frenkel.
Frenkel: The question is for what purpose. And not only for what purpose, for what effect.
Mackey’s anonymous postings repeatedly praised Whole Foods and bashed the company’s primary rival, Wild Oats. In one comment, he speculated that the smaller chain would eventually be sold after sliding into bankruptcy.
Frenkel says these remarks could put Whole Foods’ buyout of Wild Oats in jeopardy. Especially if federal investigators can tie Mackey’s postings to an actual drop in Wild Oats’ stock price. But proving that could be tricky.
Jeffrey Sonnenfeld with the Yale School of Management says the real casualty may be Whole Food’s reputation.
Jeffrey Sonnenfeld: This guy is not one of the rogue CEO’s who’s out there plundering shareholder wealth. This guy had a sequential series of dumb attacks here, and I do think for this particular company has lost the legitimacy to lead.
Whole Foods is defending Mackey’s actions. It issued a statement that the “rahodeb” postings have been taken out of context and represent Mackey’s personal opinions, not those of the company.
In Los Angeles, I’m Sam Eaton for Marketplace.
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