Corporate Fraud And Deception Whole Term Paper

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" He used the pseudonym Rahodeb after his wife Deborah. (Wikipedia). RAHODEB

John Mackey posted various comments on Yahoo Finance stock forums until last August with the username Rahodeb, after his wife Deborah. He wrote positive things about Whole Foods financial results and his gains on the stock and knocking out Wild Oats Markets Inc. The company is still trying to acquire Wild Oats Markets Inc. Following are few posts written by John Mackey;

Whole Foods Market Inc.

On November 29, 2000 he posted, "Obviously WFMI is no Wal-Mart (not yet anyway!)." Criticizing about the competitor Sunflower which is also an organic store, "Sunflower isn't too impressive. These guys won't hurt Whole Foods. Wait and see." He also predicted about the Whole Foods on June 25, 2004, stating "I believe that what is really happening with the stock is that some really smart institutions are finally realizing what I realized many years ago: Whole Foods Market is going to be a really large company someday. They will hit their $10 billion sales target by the end of the decade (probably before then) and they won't stop there. It will double to $20 billion 4 years after that (18% CAGR) and probably double again from there to $40 billion with in 5 years of then. The entire food retailing segment is undergoing a huge transformation. Wal-Mart is going to dominate the low price side of the business and Whole Foods is going to dominate the quality/service/healthy side of the business. Those companies stuck in the middle -- Safeway, Kroger, & Albertsons -- have huge labor union problems that aren't going to go away, but are likely to only get worse. The future has never looked brighter for Whole Foods than it does right now." About his company he stated, "I'm pretty sure that I understand WFMI far better than you do and that is why I'm so confident in my attacks on your "facts" and arguments. Let us keep this dialogue going over the next couple of years and we will see who is right about WFMI and who is wrong. Let us together discover who knows more about WFMI -- you or me."

Wild Oats Market Inc.

For Wild Oats he said, "I knew OATS was going to eventually crash (and I made quite a bit of money shorting them) because I know their stores, understood their strategy, and knew that Whole Foods would crush them in head to head competition which is exactly what has happened. So a tsunami may hit Whole Foods Market some day again. So what?!"

His Own Identity.

On January 2004, he claimed to be George W. Bush, denying that he not John Mackey, "I've stated my identity on this board before, but no one apparently believed me. I am George W. Bush and a long-time customer of Whole Foods Market. I own quite a bit of stock in the company and have owned it since the IPO back in 1992.... At the end of the day it doesn't matter what my non-screen identity really is or what yours is or who anyone else's is on this board." He has also claimed by saying, "my true identity is John Mackey. You can believe that one or not. Doesn't matter to me. If I really am Mackey, then I'm the ultimate insider at Whole Foods and you would be well served to pay attention to what I have to say on this board. If you don't believe I'm Mackey (admittedly the idea seems pretty far fetched) then you should still pay attention to what I have to say on this board if my ideas and arguments make sense. If they don't make sense or you disagree with me -- well that's what bulletin boards like this are all about."

Commenting on President Bush.

The anger and hatred of Bush by the Left has not produced victory but rather defeat. Combined with additional seats in the Senate and the House, the defeat of Tom Daschle in South Dakota, and a majority of State Governorships (plus future Bush nominees to the Supreme Court) means that the Democratic Party continues to lose support and power in America. Time for the Democrats to accept reality, regroup, move away from the Michael Moore's and other Leftist extremists in their Party and move back towards the center. If they do, then they might begin to win more elections and eventually regain majority status. If they don't -- well the Republicans will dominate political power in America for decades to come."

Postings on Politics.

...

They are based on years of life experience, encyclopedic reading, and clear, honest thinking. Conservative? Hardly. I'm more a revolutionary than anything else. My political views fall into the category of 'Independent' with a strong tilt towards 'Libertarianism.' Teach me to dance? That is very sweet of you. Thank you, but my life is pretty full right now." Again in 2003 he posted, | "Another person who thinks my name is John (Mackey)! Well if you really believe I'm John Mackey you should probably pay more attention to what I say on this Board. I would be the ultimate Whole Foods Insider!" (Josh Fineman and Danny Kind, July 12, 2007).
COMPETITORS

Competitors of Whole Foods Market Inc. depends up on the market around the United States. In various markets the primary competitors of Whole Foods Market Inc. is Trader Joe's. In Mid Atlantic Region the toughest competition is from Wegman's. In Texas, HEB's Central Market is the primary competitors but in California again Trader Joe, Sageway and Bristol Farms and in Boston it is again Trader Joe. In New York it is Fariway and Trader Joe'. Wild Oats are not the primary competitors in United States except in Boulder and Colorado. Whole Foods Market Inc. is feeling like a competitive pressure from Wal-Mart especially in Plano, Texas where they opened a Super Center Store which a huge collection of natural and organic products. (Whole Foods Market, 2007). For his competitor Wal-Mart, John Mackey posted various comments on Yahoo Finance forum including, "Wal-Mart, like all retailers, isn't unbeatable. They don't appeal to everyone. They emphasize every day low prices and sacrifice other important values to achieve low prices -- quality, selection, service, store ambience and beauty. These sacrificed values are important to Whole Foods core customers. Price isn't the only thing that matters to Whole Foods core customers -- perhaps to you, but not to them." Also stating, "Wal-Mart will help educate customers to the value of organic foods. As people become better informed about the value of organic foods more and more of them will migrate to Whole Foods for the higher quality, better selection, better service, and better store ambience and experience that Whole Foods provides." John Mackey criticized his rival by saying, "Most of Whole Foods core customers don't like Wal-Mart. Why not? Too big. Too dirty. Too ugly. Bad service. Lack of knowledge about the products. Underpaid employees resulting in high part-time ratio of unenthusiastic and poorly trained employees. Bad record on social responsibility." (Josh Fineman and Danny King, July 12, 2007).

CONCLUSION

Consistency is the key word for any business. Whole Foods Market Inc. started from a small food store namely SaferWay and got a huge success after merging with Clarksville Natural Grocery. However, the use of Internet for postings various comments on his competitors and on his own company surely made him suffer a lot. Executives compromised on criticism but John Mackey as being a successful executive did post a lot of criticism. Although, after he got caught of doing such postings since so many years made an embarrassing moment for him and illegal as well but he did not break the law by disclosing any of the company's confidential information. This situation can cause a lot of damage to the company. Federal Trade Commission filed the complaint for such postings, which happened to be on Yahoo finance forums, and tried to block Whole Foods Market's $565 million buyout of Wild Oats Markets because this can also lead towards low competition. The Federal antitrust committee won to block the deal of Whole Foods Market Inc. with Wild Oats Market though Whole Foods announced to buy Wild Oats for approximately $565 million. John Mackey tried to attack his rival Wild Oats Market Inc. through internet. Many of this postings claimed that Wild Oats was over valued and poorly run. He used an online user name Rahodeb for posting, John Mackey, Whole Foods Market Inc. CEO, was still shameless for the eagerness of this company's stock.

Sources Used in Documents:

References

Josh Fineman and Danny King. Whole Foods Chief John Mackey Says He Bashed Rival on Web. July 12, 2007. Bloomberg News. November 29, 2007 http://www.mindfully.org/Industry/2007/Whole-Foods-Mackey12jul07.htm

Whole Foods Market. Frequently Asked Questions. 2007. FTC Hearing. November 29, 2007 http://www.wholefoodsmarket.com/ftchearingupdates/faq.html#15

Wikipedia. Whole Foods Market. November 26, 2007. Wikipedia Foundation Inc. November 29, 2007 http://en.wikipedia.org/wiki/Whole_Foods_Market


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