Chief Of Whole Foods Extolled His Stock Online

As his online persona Rahodeb, John P. Mackey, the co-founder and chief executive of Whole Foods Market, was unabashed in his enthusiasm for his companys stock, albeit anonymously.

On occasion, he even made predictions on Yahoo message boards about the performance of Whole Foods, the natural foods grocer. For instance, in June 2006, Rahodeb wrote, So long as Whole Foods same store sales are in double digits the next 2 quarters, the stock wont trade below $50 per share (and probably not below $60).

The previous November, Rahodeb wrote, I was low on my 10.3% comp prediction and so were you big fella. 13.4%!!! Funny thing, they didnt guide their comps lower as you predicted but raised guidance for next year. Wonder why they would do that?

While Mr. Mackey has dismissed his online remarks as harmless fun, many investors and analysts were stunned that a prominent chief executive would engage in online banter with people known only as boogertooth75 and bluehairedfannypacker.

Some securities laws experts, meanwhile, say that Mr. Mackeys postings could be illegal, though the fact that they were anonymous makes the legality murky.

Peter J. Henning, a professor of securities law at Wayne State University in Detroit, said executives of public companies are required to make financial disclosures available to all investors, not just a select few.

He wasnt speaking on behalf of the company, Professor Henning said, adding, He certainly was talking about it. And he was attempting to influence the stock price.

After hearing some of Rahodebs postings, Professor Henning added, I would have to believe that Whole Foods general counsel nearly keeled over when they learned about this.

Lewis D. Lowenfels, a securities law expert at Tolins & Lowenfels in New York, said he, too, believed that Mr. Mackeys remarks could be illegal.

For a C.E.O. of a public company to make public postings regarding his company while concealing his true identity behind a pseudonym may, in and of itself, be an illegal misrepresentation.

A spokesman at the Securities and Exchange Commission declined to comment.

Mr. Mackeys online pseudonym, Rahodeb, surfaced in a sealed court document that was filed last month by the Federal Trade Commission but only became public Wednesday evening. The agency is trying to block Whole Foods $565 million buyout of Wild Oats Markets on the grounds that it would limit competition.

In the court document, F.T.C. lawyers cite a remark that Rahodeb wrote about Wild Oats to bolster its case. Whole Foods is systematically destroying their viability as a business — market by market, city by city.

When the merger was announced in February, Mr. Mackey said he had previously tried to acquire Wild Oats about six years earlier but the deal fell through. About that time, in April 2001, Rahodeb had this to say about Wild Oats: I find it simply amazing that some investors continue to have faith in this company.

Rahodeb added later in the same posting, The emperor has no clothes! Am I the only one who sees this?

Whole Foods public relations staff declined to comment yesterday, and Mr. Mackey was not available for comment.

On the company Web site, Mr. Mackey wrote on Wednesday night that his online postings were simply for fun and that he never disclosed proprietary company information. He said he often took contrary positions for the sake of argument.

Rahodebs postings therefore do not represent any official beliefs, policies or intentions by either Whole Foods Market or by me, Mr. Mackey wrote.

David Gardner, co-founder of the Motley Fool and a longtime champion of Whole Foods stock, said it would be difficult for Mr. Mackey to continue leading the company since its code of conduct and ethics warns against such activities.

The code reads: Team members have a primary business responsibility to WFM and are expected to avoid any activity that may interfere or have the appearance of interfering with the fulfillment of this responsibility.

You look at this and say it looks like he acted in violation of his own code, Mr. Gardner said. I clearly think he should step aside for a while.

John B. Elstrott, a Whole Foods board member and a professor of entrepreneurship at Tulane University in New Orleans, declined to discuss Mr. Mackeys future, saying only, This too shall pass.

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