On August 6th, six days before his now infamous op-ed piece appeared in the Wall Street Journal, Whole Foods CEO John P. Mackey sold 50,000 shares of WFMI stock worth $1.4 million. On the same day, Whole Foods Co-President and COO Walter E Robb IV sold 8,333 shares.
In light of this, a couple of questions arise: could the reason for the sale be that Mackey actually expected a backlash? Could n light of this, a couple of questions arise: could the reason for the sale be that Mackey actually expected a backlash? Could Mackey's op-ed simply be a scheme to induce a WFMI stock plunge as a result of a predictable backlash from its progressive customer base so that he could buy stock at a lower price later on?
So far the strategy doesn't seem to be working: WFMI stock has actually risen since Mackey sold it, but it's also too early to tell. The boycott is still in its initial phases and given all the coverage that it's receiving it could pick up steam over time.
Speculations aside, such a conspicuous sale right before Mackey's predictably backfiring statement is something that should be looked into by the Board of Directors and shareholders. If if turns out that Mackey manufactured the entire controversy for personal gain, and at the expense of the company's shareholders, it would be enough grounds for the CEO's dismissal.
John Makey is not new to this kind of antics either. In 2007, the New York Times reported that for seven years, Mackey had an online alter ego which he used to relentlessly promote the company’s stock as well as to attack competitor Wild Oats Markets in order to lower its stock price prior to acquiring the firm.
Update: thanks to ban nock for reminding me that on August 5th, a day prior to selling the stock, Mackey was quoted in the Guardian saying that Whole Foods sells "a bunch of junk." Maybe Mackey is simply unhappy with the direction the company has taken and these maneuvers could be an effort by the disgruntled CEO to push the company "back to its roots in selling healthy food."
Update II: according to insider-monitor.com, the August 6th WFMI stock sale by John Mackey was, by far, his biggest since 2005.
2009-08-06: Sale: 50,000 shares; value: $1,392,550 .
2008-02-25: Option Exercise: 16,000 shares; value $182,992.
2008-02-25: Sale: 8,000 shares; value: $291,416.
2007-03-23: Option Exercise: 16,000 shares; value $167,488.