In my first post in this series, I described how a central media narrative will often arise around a newsworthy incident. For instance…

…when news broke that the FTC was blocking the Whole Foods takeover of Wild Oats, the narrative supported by most of the media coverage was that the takeover wasn’t hostile, Wild Oats wanted to be bought out, the buy-out would not remove competition in the area, and no one understood how the FTC could possibly object.

Sometimes, however, an opposing narrative will arise. And this is a good thing. With narratives, as with products, competition is good–honest competition, based on logical arguments rather than on emotional plays. Honest competition ensures that the truth will out.

What sorts of facts might support an opposing narrative in the Whole Foods/Wild Oats merger? Well….

Buying Wild Oats “will greatly enhance our comps over the next few years and will avoid nasty price wars in Portland (both Oregon and Maine), Boulder, Nashville and several other cities, which will harm our gross margins and profitability,” [Whole Foods CEO John] Mackey said, according to [the Federal Trade Commission’s lawsuit].

Wild Oats “may not be able to defeat us but they can still hurt us. Furthermore, we eliminate forever the possibility of Kroger, SuperValu or Safeway using their brand equity to launch a competing national natural/organic food chain to rival us … . Eliminating (Wild Oats) means eliminating this threat forever,” Mackey said.

—‘Eliminating’ Wild Oats: Documents reveal Whole Foods CEO’s comments on deal, Boulder Daily Camera, June 20, 2007

I was a temp at Whole Foods for a week or so when they first opened in Boulder. One day when I was having lunch in the back office, I overheard the manager talking with somebody else about recent adverts put out by Wild Oats. The manager said they should undercut any sales that Wild Oats was putting on by selling the same thing for less. He added, “We will crush them.”

—Reader’s comment left at Daily Camera article quoted above (same URL).

The opposing narrative has arisen–better late than never–and it says that far from being Wild Oats’ savior, Whole Foods moved into Boulder looking to crush the local chain. As the anonymous reader comment went on to say, “I know business is business, but I found that blatant aggression pretty distasteful. Especially because this manager came from out of town to supervise the opening; he seemed to have no concern about how his comments might sound to locals, such as myself.”

Possibly even more damning is this story from SmartMoney.com and cited at BoingBoing.net on July 12:

In January 2005, someone using the name “Rahodeb” went online to a Yahoo stock-market forum and posted this opinion: No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share.

“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.”

The comments were typical of banter on Internet message boards for stocks, but the writer’s identity was anything but. Rahodeb was an online pseudonym of John Mackey, co-founder and chief executive of Whole Foods Market Inc.

—Whole Foods CEO Hid on Message Board, SmartMoney.com, July 12, 2007.

Oop. Looks like the Associated Press was on top of that a day earlier.

*gasp!* The Whole Foods CEO, saintly John Mackey, stooping to Internet forum sockpuppetry in order to discredit his rival?

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!”

And in order to boost his “cuteness” index? For cryin’ out loud, Mackey, how immature can you get?

But getting back to the pseudonymous stock price banter…

For an executive to use a pseudonym to praise his company and stock “isn’t per se unlawful, but it’s dicey,” said Harvey Pitt, a former Securities and Exchange Commission chairman. Told of the Mackey posts, Mr. Pitt said, “It’s clear that he is trying to influence people’s views and the stock price, and if anything is inaccurate or selectively disclosed he would indeed be violating the law.” He added that “at a minimum, it’s bizarre and ill-advised, even if it isn’t illegal.”

A spokeswoman for Whole Foods said Mr. Mackey only revealed information about Whole Foods that already was public knowledge. His comments “weren’t illegal” and weren’t “against company policy,” she said.

Let’s review. As a businessman, Mackey should know that this sort of behavior just plain looks bad. Right?

[A]ny release of nonpublic information could violate a regulation that prohibits selective disclosure.

“I think the SEC is scratching their heads, wondering why anyone would possibly do this,” said Scott Berdan, a partner at Kamlet Shepherd & Reichert. “This is just befuddling, and they want to be sure there wasn’t something more nefarious going on.”

An area of particular scrutiny will be whether Mackey sold shares after making statements that might have caused a bump in Whole Foods stock, Berdan said….

Depending on what’s contained in them, Mackey’s voluminous postings could be “anything from a peccadillo to something that leads to his ouster and worse legal problems,” said David Gardner, co-founder of the Motley Fool and a shareholder in Whole Foods. “It’s a great disappointment in someone I had always considered a great CEO.”

—Whole Foods CEO’s online musings create PR nightmare, Boulder Daily Camera, July 15, 2007

Right. And as the CEO of the celebrated Grocery With A Concsience, as the man who slashed his salary to $1 because his heart told him it was the right thing to do, Mackey should know that using a sockpuppet to poison the waters for his rival, while not illegal, is unethical and therefore should be against company policy. I mean, for goodness sake, I know Whole Foods’s company board isn’t exactly sat on by angels, but I’d been under the impression that out-and-out lies were a no-no there.

“As the CEO of a ‘forward thinking’ natural foods company, Mackey has let down his followers even more than the average ethically challanged CEO.”

“Best to stay away from them. There are other places to shop for healthy and organic foods in Boulder.”

—Reader comments on the July 15 Daily Camera article quoted above (same URL).

Ah, well. Innocence gives way to experience once again. And my grocery list is going to be written up with Wild Oats, Vitamin Cottage, and the grower’s market in mind.