Just Keep Talking, John Mackey

Whole Foods Market (Nasdaq: WFMI  ) CEO John Mackey is back in the blogosphere.

The thought-provoking rock star of organic groceries rediscovered his way with words last week, when he dusted off the company's official blog, which had gone silent after his abrupt apology last summer.

I'm going to address what's on your mind -- ethics, Rahodeb, and questionable hairstyles -- but I think any criticism of Mackey has to begin and end with one telling statistic: When Mackey issued a temporary hold on his blog on July 17, 2007, Whole Foods Market's stock closed at $39.97. His "back to blogging" post last Wednesday came with his company's stock resting at $28.

In other words, Mackey's silence hasn't helped Whole Foods. The stock has shed nearly 30% of its value. In fact, the organic supermarket chain has missed Wall Street's profit targets in each of the past three quarters. Don't tell me that silence is golden.

Of course, one can argue that his blog didn't help, either. The stock has shed more than half of its value since Mackey launched the blog back in September 2005. However, if you go all the way back to the original scene of the crime -- when Mackey began posting as Rahodeb on Yahoo! (Nasdaq: YHOO  ) Finance stock boards in 1998 -- you'll find that Whole Foods' stock grew roughly fivefold between the time he participated on the forum anonymously and his last post in the summer of 2006.

You may very well have a strong opinion on the merits of a CEO who posts anonymously on a stock community board over an eight-year span. But there are more important factors dragging down the company's performance than some self-imposed gag order. It's hard to argue that Mackey's attention strayed during his wild days of walking in Rahodeb's shoes, given the company's stellar performance from 1998 to 2006.

Defending Mackey's right to write
Some CEOs play golf. Some CEOs date supermodels. Mackey had the audacity of passing the time by passionately defending his company on a stock board and assuming the same anonymity as anyone else who hits up the free Yahoo! discussion board with a screen name.

"My mistake here was one of judgment," Mackey writes in last week's blog entry, "not ethics."

I don't agree entirely. A handful of his 1,400 posts -- and I did take the time to read most of them last summer -- wandered into gray areas of ethical prudence, such as when he defended a knock on Mackey's haircut in the third person. It's an amusing post, but it hints at a deceptive persona.

The key takeaway is that both the SEC and Whole Foods looked into each and every post and concluded that Mackey never tried to manipulate the stock or surrender any trade secrets.

"I was just one anonymous poster among hundreds at any particular time," he explains. "Rahodeb had no authority or power to do anything in the real world, including inflating Whole Foods Market's stock price."

As he rightfully points out after that, if he had come clean and posted as the company's CEO, it would be then that his opinion would have carried a little more weight and manipulative influence.

Like Rodman, he's retired from hitting the boards
Mackey won't be bringing Rahodeb out of retirement. Back in November, the company issued a code of conduct that bans its executives from participating in online message boards.

That's a pity, because I've always enjoyed it when CEOs have stopped by to post on the open Fool.com discussion boards. Overstock.com's (Nasdaq: OSTK  ) Patrick Byrne has done just that.

Unfortunately, some companies have a problem with learning where to draw the line. Sony (NYSE: SNE  ) and Wal-Mart (NYSE: WMT  ) suffered some media smackdowns when they created fake blogs in support of their products. Some people still haven't forgiven Microsoft (Nasdaq: MSFT  ) for paying people to edit its own Wikipedia entries. Then again, what about all of the companies like Enron, which have done far worse in the shadows of silence?

A CEO should be able to speak openly. In fact, a leader should be encouraged to do so, if he or she has the skills to do so effectively. Company blogs make communication easy these days, but you've seen artisans such as Warren Buffett weaving words for years.

Even in faceless cyberspace, a fast-growing dot-com often benefits from a familiar person. Whether it's the iconic still of Tom from MySpace or Steve Case's monthly letters to the AOL community when the online service ruled the Web, most great companies have a colorful face for their company.

Mackey is that person for Whole Foods, the company he started 28 years ago. It's good to see him chatty again, because he really is the face of the company.

No comment on his hairstyle.

Wal-Mart and Microsoft are Motley Fool Inside Value picks. Whole Foods Market is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz digs the new Whole Foods that opened just a mile from his home last year. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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