Whole Foods Markets, Inc. (NASDAQ: WFMI), once the grocery darling of the investing market, took a serious wrong turn somewhere in the M&A market in 2007. Ever since the ill-fated acquisition of Wild Oats, WFMI has taken a dive, plunging from highs in the $60s (2006) and $50s (until late 2007) to as low as $8.68 this past December. So it was with great joy that investors heralded news of the company's fiscal third quarter results last night, exceeding analyst expectations, with earnings per share of $0.25, or $35.0 million, and sales up 2% over the year-ago quarter, to $1.9 billion. Same-store sales declined compared to the year-earlier quarter, but reversed their declining trend, down 2.5% from Q3 2008 but up from Q2 2009.

In a sign that you can't keep a good man down, the SEC has dropped its investigation into message board postings by Whole Foods (NASDAQ: WFMI) CEO John Mackey.

Reuters writes that the agency as "concluded a probe into its chief executive's anonymous Web chat room messages about then-rival Wild Oats Markets and recommended no action be taken."

Mackey can now go back to posting on other subjects but will have to come up with a new name to disguise his real identify. The old one, Rahodeb, has already been taken.

Douglas A. McIntyre is an editor at 247wallst.com.

When a corporate executive begins to embrace the communication medium known as blogging, the world is generally a better place. In general, executives who blog are free from marketing censors and fluff that masks most corporate information -- from press releases to scripted quarterly results announcements.

Well, that is until one of them starts blogging anonymously in order to slam the competition and spread FUD all over the place. Mr. Mackey was caught red-handed this past summer posting anonymously to Yahoo!'s (NASDAQ: YHOO) finance message boards in relation to badmouthing natural food grocery competitor Wild Oats for a period of seven years. Mackey did not reveal that it was himself disparaging his competition at the same time Whole Foods Market (NYSE: WFMI), the company he founded in 1980, was considering a merger with its largest natural foods competitor.

After Whole Foods Market (NASDAQ: WFMI) CEO John Mackey bizarre antics prompted an SEC investigation and widespread media hoopla, the company's board of directors has decided on a new policy. Top executives and directors will now be explicitly prohibited from posting on online forums about the company, its vendors, or its competitors, except on Whole Foods-sponsored sites.

Happily, the change does not prohibit them from posting about other topics. So Mr. Mackey will still be able to compliment his own hairstyle while posting anonymously.

It's kind of bizarre that Whole Foods even had to add this to its code of ethics, and it seems unlikely that this kind of thing will ever happen again at any normal company. Of course, it happens every day over at Overstock.com (NASDAQ: OSTK), where Director of Communications Judd Bagley routinely attacks critics on Yahoo! message boards and Wikipedia.

At least it's good to see that the board at Whole Foods takes ethics seriously, and is willing to take actions to ensure that its executives don't do anything to jeopardize the company's reputation or get it in trouble with regulators.

Overstock directors: Where are you?

For some reason a Wall Street Journal columnist, Collin Levy, has decided to defend Whole Foods Market (NASDAQ: WFMI) CEO John Mackey, who is under fire for pumping Whole Foods stock anonymously on Yahoo! message boards, sending emails to his company's board talking about acquiring Wild Oats as a way to eliminate competition, and just generally doing a pretty good impersonation of Patrick Byrne.

Talking about labor unions, he's said that "The union is like having herpes. It doesn't kill you, but it's unpleasant and inconvenient."

Mr. Levy would have us believe that the controversy swirling around Mackey, and the calls for his firing/resignation are payback for his union busting. But the fact is that Mackey, through sheer stupidity and arrogance, has gotten himself in trouble with the SEC, and may very well have given the FTC enough rope to stop the Wild Oats deal.

Combine that with the fact that stock is about 50% off its high, and you have to at least consider the idea that maybe it's time for new, more sane, management at Whole Foods.

Today was a big day for Whole Foods Markets Inc. (NASDAQ: WFMI) as it had its court date regarding the merger with Wild Oats Markets Inc. (NASDAQ: OATS) and reported quarterly earnings after the close. As of 5:47 p.m., WFMI stock is up 10.1% in after-hours trading.

Chronologically then:

The question before the court today was whether these two companies constitute a unique market, as clearly they both compete with several other companies that sell organic foods, some as large as the world's biggest retailer, Wal-Mart Stores Inc. (NYSE: WMT). However, if Wild Oats acts as a constraint on Whole Foods, then a combined company would have greater pricing power. Key to the FTC case (which filed the suit against the $565 million merger) is an e-mail sent by Whole Foods CEO in which he says the deal would enable the company to "avoid nasty price wars." Mackey was also found leaving messages on Yahoo! message boards.

After the close this afternoon, Whole Foods also reported third-quarter earnings. While profit slipped 8.9% in the most recent to 35 cents per share, it beat analysts estimates of 33 cents per share. Sales were 13% higher during the quarter reaching $1.51 billion, a little short of the $1.54 billion estimated by analysts. The organic grocer was hit by costs on new stores. Whole Foods spent $15 million on preopening and relocation costs.

Key metric same-store sales rose 7% -- impressive, but less than the 9.9% jump a year ago. CEO John Mackey noted that comparable sales so far in the fourth-quarter have stabilized, as indicated from July 7.6% same-store sales growth. Next year, Mackey said he expects to open even more stores. As for the merger, he was hopeful it would be approved.

By 6:12 p.m., WFMI shares are up 8.3% in after-hours trading to $40.10.

The question facing analysts and investors in Whole Foods International Market (NASDAQ: WFMI) ahead of Whole Food's earnings release next week has got to be the effect of CEO John Mackey's recent "macho posturing" and the FTC anti-trust suit to block the merger with Wild Oats Markets (NASDAQ: OATS). Wild Oats doesn't feel that circumstances warrant anti-trust action, as there are plenty of markets for organic produce. Time will tell if the FTC agrees.

Whole Foods fell short of expectations in the previous two quarters, according to Thomson Financial, but the one-year EPS growth rate is 5.2%, better than the industry average. Wall Street is looking for EPS for the current quarter to be .33. The current consensus recommendation is to hold WFMI.

The share price has dropped from its 52-week high of 66.25 last October, to a 52-week low of 36.00 at close on Friday, in the midst of last week's market downturn. Overall, the price has trended downward this past quarter. In the meantime, investors and analysts will just have to hold their collective breaths and wait to see what next week brings to the market in general, and Tuesday's earnings release to Whole Foods specifically.

More Whole Foods coverage:
Peter Cohan: Whole Foods CEO determined to do himself in -- electronically
Jon Ogg: Meet the next Whole Foods ... Kroger
Sarah Gilbert: Whole Foods acquisition of Wild Oats may be blocked by FTC: Monopolistic organics?
Eric Buscemi: Whole Foods: Multiple signs indicate to stay on the side lines

It's about time. Granted, I'm a bit of prude when it comes to corporate governance and compliance with SEC regulations. I started calling for Whole Foods (NASDAQ: WFMI) CEO John Mackey to resign on July 18th following his revelation that he had been posting anonymously about his company on stock message boards. The SEC is currently investigating Mackey's postings.

Now CtW Investment Group, which manages money for union pension funds, has taken it a step further. According to a piece in today's Wall Street Journal, the fund has sent a letter to John B. Elstrott Jr., the company's lead independent director, to name a new independent Chairman to replace Mackey on the company's board.

CiW argues that even if Mackey is not in serious legal trouble, he exercised poor judgment that could harm the company's efforts to negotiate with the FTC to consummate the acquisition of Wild Oats (NASDAQ: OATS).

An interesting subplot to this story is that Mackey has a long history of being anti-union, and this move could be construed as a way for union supporters to smack him around a little bit.

But I doubt it. There are very valid reasons for Whole Foods to dump Mackey as Chairman of Board certainly, and probably as CEO.

While the shareholders and board of directors at at Whole Foods Market (NASDAQ: WFMI) wish CEO John Mackey would pipe down, and the board at Overstock.com (NASDAQ: OSTK), if it exists, seems indifferent to CEO Patrick Byrne's Regulation FD-flouting rants, Herb Greenberg has a nice WSJ column (subscription required) on executives who take a different approach. To borrow a line from Calvin Coolidge, these companies have decided that nothing they don't say will do them any harm.

The piece talks about a few thinly traded, closely held companies, several of which list their shares on the OTC markets, which tend to be highly illiquid and provide little exposure. These companies don't hold regular conference calls and don't present at investor conferences, but some have actually provided investors with very strong returns.

The highlight of the column is a company called Expeditors International (NASDAQ: EXPD), a transportation and logistics business. Expediters responds to shareholder inquires by filing 8-Ks with the SEC providing pithy, and often bitchy, responses to questions. The latest series is one of the strangest 8-Ks I have ever seen.

Shareholders of Whole Foods Market Inc. (NASDAQ: WFMI) buyout target Wild Oats Markets, inc. (NASDAQ: OATS) may be left holding the bag if the proposed acquisition doesn't go through because of CEO John Mackey's propensity for "macho posturing" and anonymous message board postings.

But in the meantime, Whole Foods customers are lining up to buy a pretty nifty reusable canvas tote bag for $15 at the company's stores. Emblazoned with oh-so-very clever slogan "I am not a plastic bag" (I wonder how much the Madison Avenue firm got for coming up with that stroke of brilliance), the bag appeals to environmentally conscious consumers, and those who want to make it very clear to all of us lesser beings just how green-friendly they are.

Of course, "reusable" bags are all the rage these days, so it's not surprising that the Whole Foods demographic would rush to get theirs.

According to CNNMoney, "Whole Foods' Edgewater, N.J. location had more than 300 people waiting in the rain, according to Shanks. I'm sure that some of them waited in their idling SUV's with the air conditioning on. The bags are fetching over $100 each on eBay.

I try to be environmentally-savvy too, but this just reeks of poserishness. Do you really need to spend $15 (or $100) on a canvas bag to show what a great person you are? Here's an idea: Buy a $5 tote bag and donate the other $10 to charity. You'll be doing just as much to help the environment, you'll help out a charity too, and you'll be less annoying.

Whole Foods Market Inc. (NASDAQ: WFMI) CEO John Mackey deserves the gold medal for understatement for calling his anonymous posts on Yahoo message boards an "error in judgment" in one of the least convincing apologies ever. Monumental stupidity is more like it.

What puzzles me about this issue is why a rich, successful and well-regarded CEO like Mackey would even care about the opinions of a bunch of chat board clowns? Is he really that narcisstic that he needs to constantly prove to his greatness? That's really kind of sad when you think about it.

Mackey now is making shareholders pay the price for his insecurity. The Wall Street Journal reports today that the SEC has launched an informal probe of his conduct. In particular, regulators are going to see if Mackey gave overly optimistic statements on the message boards, the paper said.

A special committee of the board also is investigating the matter, which came to light in part because of the regulatory review of its planned acquisition of Wild Oats Markets Inc. (NASDAQ: OATS) which has encountered stiff opposition.

Mackey, who co-founded Whole Foods, seems to be most sorry that he got caught. Any lower-level executive who did what he did would have been at a minimum reprimanded and possibly fired. Though Mackey says he meant no harm, he still needs to be taught a lesson.

Whole Foods should strip him of any options grants awarded to him this year. Mackey should also reimburse the company for any costs its incurred to defend him. Oh yeah, he should be banned from ever posting information on Yahoo chatrooms even under his own name.

He ought to have better things to do with his time.

MAJOR PAPERS:

• Bear Stearns Companies Inc (NYSE: BSC) says that its two hedge funds tied to subprime loans are basically worth nothing, reported the Wall Street Journal (subscription required).
• An "error in judgment" is what Whole Foods Market Inc (NASDAQ: WFMI) chairman and CEO John Mackey called his anonymous blogging about his company and rival Wild Oats Markets Inc (NASDAQ: OATS) in an apology, reported the Wall Street Journal.
• SEC chairman Christopher Cox wants Congress to tighten its oversight of the $2.4T municipal bond market, the result of increasing complexities in the bond market and lax leadership at a number of firms, reported the Wall Street Journal.

OTHER PAPERS:

• Kohlberg Kravis Roberts is planning to offer $24M to acquire Macy's Inc (NYSE: M), according to Women's Wear Daily (subscription required).
• The U.K. Times reported that Barclays plc (NYSE: BCS) has deided against raising its bid for ABN Amro Holdings (NYSE: ABN).
• Honda Motor Co. (NYSE: HMC) is increasing its production capacity in North America and in other places, in order to meet growing demand for its fuel-efficient cars and to maintain momentum for global growth, reported the Associated Press.

Carrying on in its heralded tradition of misguided editorials, The Wall Street Journal (subscription required) published a real doozie today. According to the piece:

Reading about the covert blogging of Whole Foods CEO John Mackey, we were reminded of a New Yorker Cartoon from some years ago featuring two mutts and a computer. "On the internet," one says to the other, "nobody knows you're a dog."

Apparently U.S. financial regulators don't get the joke. They're responding to Mr. Mackey's anonymous blogging by treating him like a dog -- or more precisely a potential violator of U.S. securities laws, with the bonus goal of scuttling Mr. Mackey's attempted purchase of Whole Foods competitor Wild Oats. The SEC is leaking (as usual) that it has opened an "informal" enforcement probe. Sure, "informal."

As Gary Weiss pointed out, the issue wasn't his blogging, which he didn't do anonymously. He was caught posting on Yahoo!'s message board for Whole Foods (NASDAQ: WFMI) without identifying himself. And his posts appear to have been pretty misleading: He talked down competitor Wild Oats (NASDAQ: OATS) while his company was pursuing its acquisition. It has also been reported that Mackey made predictions about the future stock price of Whole Foods, which is completely inappropriate.

The issue here is that Mackey's posts seem to fly in the face of Regulation FD and in defending him, the Wall Street Journal (or more specifically, its editorial page editors) is taking on that regulation. Shame on them.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that John Mackey, the CEO of Whole Foods Market Inc (NASDAQ: WFMI), used a pseudonym to blog about his company on Yahoo message boards for eight years, including panning rival Wild Oats Markets Inc (NASDAQ: OATS), which Whole Foods is trying to buy.
• Carl Icahn's American Real Estate Partners new offer of $37.25 a share for Lear Corp. (NYSE: LEA), supported by the Lear board, has been rejected by proxy advisory firm Institutional Shareholder Service, reported the Wall Street Journal.
• Barron's Online's (subscription required) "Inside Scoop" column reported that two institutional investors, Buckingham Capital Investment and Morgan Stanley, have sold about 3.2M shares of Build-A-Bear Workshop Inc (NYSE: BBW), as they feel the company won't get much more of a premium as a takeover target, if private equity is still even interested at all.
• JP Morgan Chase and Company (NYSE: JPM) and Goldman Sachs Group Inc (NYSE: GS) have obtained key roles advising Apollo Management on its expected IPO, reported the Financial Times (subscription required).

OTHER PAPERS:

• According to representatives from Congress, exclusivity deals like Apple Inc's (NASDAQ: AAPL) multi-year iPhone contract with phone provider AT&T Inc (NYSE: T) trap customers, forcing the users to stay with the providers as long as they want to continue using certain devices, reported AppleInsider.com.

The CEO of Whole Foods Markets Inc. (NYSE: WFMI) is proving to have an ability, rare among CEOs, to hang himself with his electronic words. The Wall Street Journal reports that between January 2000 and last August, John Mackey used the name "Rahodeb" -- an anagram of his wife Deborah's name -- to make nearly 1,400 posts at Yahoo! Inc. (NASDAQ: YHOO) Finance message boards designed to pump up Whole Foods' stock and denigrate that of its then-rival Wild Oats Markets Inc. (NASDAQ: OATS).

My favorite Rahodeb quote was used to cut Wild Oats down to size. He often criticized Perry Odak, Wild Oats' former CEO, who resigned last year. "While Odak was trying to figure out the business and conducting expensive 'research studies,' to help him figure things out, Whole Foods was signing and opening large stores in OATS territories," Rahodeb wrote in 2005. "Odak drove off most of the long-term OATS natural foods managers" and brought in executives who "didn't know too much about the natural/organics industry or their customers."

Meanwhile Mackey also made use of e-mail to make comments that made him look bad. His comments about the competitive impact of his proposed Wild Oats merger suggest to the government that the merger's intent is to raise consumer prices.