Posted 9:08 AM by Angie Schultz

Sockpuppet in Chief

I spent a year in Pasadena[1] one week, and I got my lunch at the nearby Wild Oats Market (which the natives referred to as Wild Goats). Ordinarily I don't go in for that "organic" crap -- figuring that it's chock full of bug parts and e coli -- but Wild Goats was close and its deli had a variety of interesting dishes that weren't egregiously self-satisfied and politically correct.

So I was mildly interested (and dismayed) when Niles read me an item in the business section about how Whole Foods had closed a deal to buy Wild Goats Oats. Ah, but that wasn't all -- turns out that Whole Foods' CEO, John Mackey, had been posting to Wild Oats' boards using the sockpuppet "Rahodeb", running down the company:

"Would Whole Foods buy OATS?" Rahodeb asked, using Wild Oats' stock symbol. "Almost surely not at current prices. What would they gain? OATS locations are too small." Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management "clearly doesn't know what it is doing .... OATS has no value and no future."

"Rahodeb" is an anagram for Deborah, the name of Mackey's wife. At least Rahodeb didn't disavow his interest in Whole Foods:

Rahodeb had begun posting on Yahoo Finance in the late 1990s, and quickly became known as a cheerleader for Whole Foods stock. "I admit to my bias," he wrote in 2000. "I love the company and I'm in for the long haul. I shop at Whole Foods. I own a great deal of its stock. I'm aligned with the mission and values of the company ... Is there something wrong with this?"

But he did talk about himself in the third person:

Rahodeb expressed pride in the CEO's work. "While I'm not a 'Mackey groupie,'" he wrote in 2000, "I do admire what the man has accomplished."

and

Rahodeb even defended Mr. Mackey's haircut when another user poked fun at a photo in the annual report. "I like Mackey's haircut," Rahodeb said. "I think he looks cute!"

Maybe it was his magic boyfriend.

Now, I'm not a business tycoon like Mackey, so it would appear to me that not only is this lame and petty, it really isn't a good use of a CEO's time.

Furthermore, the post in the first quote above -- dismissing the possibility of Whole Foods buying Wild Oats "at its current price" -- was made in January 2005, when Wild Oats stock was $8 a share. Two years later, Whole Foods actually did buy Wild Oats at $18.50 a share. To your average uninformed amateur layperson blogger, it looks as if Mackey's one-man campaign backfired, big-time.

Maybe I should have titled this "Business Ideas That Work" (with a nod to Agent Bedhead).

Turns out though, that although sockpuppetting (and losing money while doing it) makes you look like a dick, it isn't actually illegal. The FTC is suing, though. [SEE UPDATE]

Often on blogs I see someone (metaphorically) beating a dead (or living) horse, and I think they're just obsessed. Usually, someone else will accuse them of being a paid shill, and I always think that's nuts. Who the hell would pay good money for someone to run down or build up a company/idea/President on a blog, fer chrissakes?

I guess now we know.

I gotta get me some of that action.

[1]California

UPDATE 7/17/07: The FTC is suing to block the Wild Oats takeover on anti-trust grounds, not because of the sockpuppeting. The Captain's Quarters points to this NYT story, which says that the FTC is just doing an informal inquiry. You won't read that in the main body (where it says "formal inquiry") -- it's in the correction at the bottom of the page.