REVELATIONS that Whole Foods Market, Inc. (NASDAQ: WFMI) CEO John Mackey used a pseudonym to post bullish messages about his company while trashing its competitors on Yahoo! Finance’s message boards for eight years has tongues wagging in executive suites and boardrooms everywhere.
The Wall Street Journal has the full story, which came to light earlier this week in a Federal Trade Commission antitrust lawsuit seeking to block Whole Foods’ takeover of Wild Oats, a competitor that Mackey trashed on Yahoo! Finance under the handle of “Rahodeb,” an anagram of his wife’s name, Deborah.
I for one am not in the least bit surprised that company officers have been posting on Yahoo! Finance message boards. Companies monitor message boards closely. For as long as I can remember, any time someone has linked to an article on IR Web Report from a Yahoo! Finance message board, some of the first people to click through on those links are from inside the company itself.
The standard advice to executives from counsel and IR advisers is that they should stay off the boards. That people with big egos like CEOs and other executives are expected to watch, but not participate in the message board banter is unrealistic. They can’t help themselves. They’re people.
Maybe we should all look in the mirror
I find it just a little hypocritical that some commentators are criticizing Mackey for participating in the conversation on his company. What he did wrong was not the act of participating, but the fact that he wasn’t being honest about who he was.
If he had used his real name, we’d be singing his praises. Well, I would — even though I’d think he was a bit of jerk for dissing his competitors. And I’d hope that he was participating not because of some “PR strategy” or “business objectives” but because he genuinely wanted to participate in the conversation.
Obviously, there are some legal constraints on what someone in his position can talk about, but I think it would be enormously beneficial for investors if more CEOs participated in chat forums and blogs. Under their real names, of course. And even if they want to be jerks and talk trash about their competitors.
As investors, customers, employees etc. we’d get to know them better, and be better able to form our opinions about them as leaders. Of course, this doesn’t fit with the traditional PR approach of doing something only as a “tactic” or part of a “strategy” but it’s transparent, which is a good thing if that’s part of your strategy.
Update: The New York Times quotes some legal experts on the issue.