It looks like Greenberg is in bed with the
shorts. He savaged WFMI a year ago as well, although he
retracted it at the end of the year by admitting he had
been wrong--after the damage to their stock was
already done.

He is missing the point of what WFMI
is doing as well (or perhaps he and other shorts are
really concerned that without the drag of the dot com
business WFMI will continue to show strong growth and he'd
better do what he can to undermine the company's
strategy). WFMI has found a way to insulate its core retail
business from the impact of its dot com business. This
allows the core retail business not to have its EPS
impacted by the dot com business and it allows the dot com
business to make aggressive investments for growth without
being handicapped by the core retail business. For an
interesting contrast look at the first page of the Money and
Investment section of today's WallStreet Journal. This
article explores the problems that Staples and other B&M
retailers are having with their dot coms hurting their
earnings growth. Staples wants to have their earnings
estimates in First Call stated without the dot com losses.
First Call doesn't want to do it. WFMI has found the
answer that Staples and other companies are seeking.
Instead of slamming WFMI, Greenberg should be praising
the company for coming up with a brilliant solution
to the problem they struggled with in 1999 and
Staples and others are still struggling with today--how
to promote an e-commerce business without destroying
the market capitalization of the B&M business. WFMI
has found the solution. I believe it is foolish to
believe that WFMI will ever again put themselves in a
position where the dot com business will hurt the core
retail business. If the shorts are counting on this I
believe they will be sorely disappointed (as they appear
to be right now with WFMI escaping the dot com
earnings trap they were in last year).

Whether the .com results are aggregated or not is
irrelevant. If you start with the assumption that WFMI had an
asset, then as a shareholder, all you should care about
is whehther you got a fair deal or. In other words,
the fact that WFMI may not have to put another dime
in it, etc., is reflected fairly in the deal. Absent
further information, value was not created nor
destroyed.

My personal belief is that, regardless of
accounting, every dollar of capital invested in etailing is
dollar destroyed. WFMI's agreement only shields the
accounting and only temporarily. Shielding from the economic
impact is contingent on future events that are somewhat
beyond their control.

"Every dollar of capital invested in etailing is
a dollar destroyed." Surely you exaggerate the doom
and gloom of e-commerce as much as the New Economy
faithful were exaggerating the upside just a few months
ago. E-commerce is here to stay and will become an
increasingly important part of our existence as time passes.
WFMI is aggressively positioning themselves for the
future and they are doing it without hurting their
existing retailing business. It is the Venture Capitalists
who are taking the big risk with WholePeople.com--not
WFMI shareholders. No doubt Hedge, if WFMI made no
investments in their e-commerce future and sat completely out
of the game, you would be the leader of the crowd
trashing them a few years from now when e-commerce begins
to pay off. You would call the WFMI management team
idiots and "nimrods" for taking such a short-term
perspective and ignoring the long-term. WFMI has made a
strategically brilliant move--they have protected short-term
shareholder interests while positioning the company to be a
long-term winner in e-commerce. You, Herb, and the other
shorts can say whatever you like. WFMI will have the
last laugh.

Our differences in opinion will be
empirically tested over time.

Hedge scorecard on 1/24
WFMI short at $44
+13% (congratulations--so
far).

Hold that short long-term Hedge!

I disagree. I believe none or very few e-tailers
will be successful -- no exaggeration.

You are
wrong about the structure of the deal. You are
potentially exposed. The VCs took $35mm of risk. You are
taking the rest. That is the way it stands now. The only
way that this changes is if a) WFMI can offload the
risk to the public or b) WFMI can restructure the
deal.

If you believe in the future of .com, you want the
risk and the potential reward. If you don't, like me,
you hope that .com can't be peeled away and will
negatively impact the value of the mother entity. If you
really love the .com, as a long-term investor, you
should be encouraging WFMI to keep as much as possible
and too fund as much as possinle internally.

I agree with Hedge on this point: accounting
gimics are just gimics and moreover they are ignored by
investors. Whatever wholepeople costs, wholepeople
shareholders will pay. Note that wholefoods did not just
contribute amrion but also made a $20 million investment in
some health organization (I'm not sure where that is
carried).

I'm not saying that wholepeople can't be worthwhile.
But is is very speculative: e-tailing businesses have
not been generating profits. No one understands what
the long term economics of this business are, that is
what it takes in advertising costs to drive
sales.

Now that I've agreed with Hedge, I'll also write
something disagreeable. I don't think he has a consistent
view of why he is short since it changes from
day-to-day. Is it the .com: he doesn't like it but usually
doesn't cite it as the main reason nor does he explain
why long term growth its bad ("it just is, trust
me"), nor does he explain why the costs should impact
WFMI more than other retailers. Maybe it is vague
feelings about all of this.

Consider the .com "perception" gravy. As for the
reasons to not own the stock, ask your fellow
shareholders and those waiting to become shareholders. Because
it is their conviction, not the shorts, that
pressures the stock. Forget me, I'm just a gnat. The stock
and the company performance speak for themselves.

The stock performance is subject to condition of
the overall markets, the perception of the analysts,
individual investors, institutional investors as well as
manipulation by the shorts and momentum investors.

The
company's performance does speak for itself - quarter after
quarter after quarter......

The shorts seem to be
paying particular attention to the stock at this time no
doubt as a final push to get themselves out before the
company makes its next quarter or two and starts trading
on 2001 estimates.

This .com criticism is
another pathetic attempt to misrepresent what was clearly
a brilliant move by Mackey and WFMI. They have
determined and executed a strategy that will enable them to
leverage the most powerful brand in the natural foods
industry to participate in an area (the internet) that
will clearly have a huge impact on the way people do
business in the future. What's even more brilliant is the
fact that, unlike other e-tailers who have failed or
are in trouble because they have had to spend so much
on customer acquistions, Wholepeople.com will not
spend huge amounts of money on advertising for customer
acquisition because they will market to and acquire those
customers in their own bricks and mortar stores.

Of
course the success of the internet will wax and wane
until only the legitimate players are left. I like
Wholepeople.com and WFMI's chances. In the meantime, rather than
spending significant liquid resources of their own, WFMI
has used venture capital money ($35 million of it) to
fund the operation. This structure shields the losses
up to that amount from WFMI and thus protects the
core business of WFMI and its shareholders from those
losses while it ramps up the business. I applaud Mackey
and the company for its creative and bold move to
enable its shareholders to participate in leveraging the
Whole Foods Market brand into the internet without
affecting its core business.

Herb Greenberg's
implication of questionable practices in this regard was a
shameless attempt by him and his short pals to question and
raise doubt to what is clearly a brilliant move and
strategy. To imply that Wholepeople.com will blow through
the $35 million in 3 or 4 more quarters simply defies
basic mathematics and logic and is a further
demonstration of his agenda.

The COMPANY's performance has been nothing to
write home about. Are we talking about the same
company?

And you not of which you speak re
etailing. There are many, many (r)etailers (Staples, Barnes
& Noble, even WMT -- but the list is hundreds long
now) that have been able to leverage their retail
operations and most, thus far, have been very unsuccessful.


And what planet do you live on (I live on Zlutarch)?
You think the VCs gave WFMI the money for free? You
think those guys are idiots? Do you know what WFMI
contributed? Well, let me tell you -- they contributed Amrion,
which they purchased for $200mm and they contributed
all of their internet assets, which they had
developed for some time and had launched in March 1999. I
don't know how much they spent on the internet sub in
aggregate nor do I know the value of the asets they
contributed. However, I do know that the VC's got Amrion and
all of this other stuff at a valuation of $140mm.
Excuse me you, say, but I thought WFMI paid $200mm for
Amrion alone, not to mention the time and effort and
money they put into .com? That's right. Your core
business and shareholder value already got @#$%ed by this
maneuver and may continue to get @#$%ed in the future.


WFMI and Mackay leveraged you, that's all. And you
don't even know it. Well, that destruction of value is
done. But please don't confuse the manipulation of
assets and press releases with the creation of
shareholder value.

The core business is the core
business, regardless of how you account for it. What you
should be concerned about is your exposure.

I guess we'll agree to disagree about the future
of e-commerce. In 5 years their won't be such a
thing as e-tailers because e-commerce will be part of
our daily lives. Every retail company will use the
internet as one of their means of distribution. Whole
Foods is going down the learning curve today and will
be ready for tommorrow. Yes, the VCs are only taking
a $35 million risk. You think WholePeople.com will
burn this up in a few quarters. I don't think they'll
ever use it all up. We shall see.

Concerning
stock price appreciation, I've gone back into the past
and have determined stock prices for WFMI at
approximately the same time each year for the last 5 years.
Let's take a look at these prices and their CAGR over
the last 5 years:
Date Price CAGR year/over/year

2/28/95--$13.50
3/12/96--$17.375 28.70% 28.70%
3/25/97--$22.00 27.65%
26.61%
3/31/98--$69.75 72.88% 217.04%
3/29/99--$31.875 23.96%
-54.30%
3/27/00--$44.00 26.66% 38.03%

These numbers are very, very
revealing Hedge about true returns for WFMI over the last 5
years. Here are the facts:
1. WFMI has had a CAGR
over the last 5 years of 26.66%.
2. Over the last 3
years WFMI has had a CAGR of 25.99%.
3. Over the
last year WFMI has had a growth rate of
38.03%.

What does it mean? It means that you continually
misrepresent the true performance of this stock on this Board.
WFMI has shown excellent growth over both 1 year and 3
year periods. It means that if you take out the bubble
year of 1998 when the stock was bid way, way over its
intrinsic value the stock has shown very strong growth in
valuation. If you've made money shorting this stock then you
made it shorting it during the bubble year of 1998 and
you've made it trading on ordinary volatility. The
long-term trend of this stock is clear--it is going up! It
will continue to go up with its growth rate in
earnings which both WFMI and analysts are projecting to be
20% to 25% over the next few years. WFMI has put 1999
behind it. No more y2k, no more Amrion, and no more dot
com losses. The core retail growth in this company is
going to burn you if you continue to hold your short
long-term.

Our differences in opinion will be
empirically tested over time.

Hedge scorecard on 1/24
WFMI short at $44
+14% (congratulations--so
far).

Hold that short long-term Hedge!

zzzzzzzzzzz...the more you rant, the more sillier
you appear. What the hell was that????

How
about some simplicity...

WFMI trades at the same
price that it did in OCTOBER 1997, before the steep
appreciation of that year... or

WFMI is down 33% in 2
years (May to May) or

WFMI is down 12% in the
last year or

WFMI has returned 13% over the
past 3 years (for a compounded return of 4.1%)
or

WFMI has returned 42% over the past 4 years (for a
compounded return of 9.2%), which trails well, just about
everything...

and the kicker...even over 5 years, the stock has
undeperformed the S&P 500!!!!!!!!!!

You are living in
the past. For you to deny it is just embarrassing.
You must be frustrated, as must be most WFMI
shareholders.

zzzzzzzzzzzzzzzzzzzzzz...the more times I prove
you wrong the sillier you look on this board and the
less authority you have working your short
agenda.

The numbers I gave on that last post were all
accurate numbers. All year-over-year numbers were compiled
from the same time periods. These were the exact
closing prices on these days. The value appreciation is
clear and obvious and all your misrepresentations to
the contrary do not change the facts.

Your
numbers in contrast are not accurate numbers. You
continue to throw numbers on this board to prop up your
B.S. that do not tie back to reality. A great example
of this is when you simply made up numbers about
WFMI's store economic model. You claimed Bonnie Tonneson
backed you up but in fact her published numbers backed
up me--not you. Your only reply was to fall back on
your "professional status" and claim that WFMI and
sell-side analyst numbers don't mean anything.

Yes
WFMI is down from 2 years ago. This is the only thing
in your previous post that is accurate. All the rest
of your numbers are inaccurate if year-over-year
dates are used. I don't have any idea where your
numbers come from.

I am frustrated--not with WFMI
but with you. Your lack of intellectual honesty in
these matters is frustrating to me.

Our
differences in opinion will be empirically tested over
time.

Hedge scorecard on 1/24 WFMI short at $44
+14%
(congratulations--so far).

Hold that short long-term Hedge!

I have no agenda. I certainly have had no impact
on your fellow shareholders, who have already done
their voting.

Re factual information, here is
some info re closing prices. You are correct, I was a
bit off on the longer-term returns. Call me sloppy,
but don't call this good performance...Don't even
call it average performance.

Yesterday's
closing price: $38 1/2

5/21/99 closing price: $43
5/8 (-11.7% to date)
5/22/98 closing price: $57
5/16 (-32.8% to date)
5/23/97 closing price: $31
(+24.2% or 7.5% annual)
5/30/96 closing price: $24 5/8
(+56.3% or 11.8%)

5 yr return 21.5% vs. SPX
21.5%
6 yr return 15.6% vs. SPX 20.7%
7 yr return 9.9%
vs. SPX 17.7%
8 yr return 16.5% vs SPX
16.5%

Again, the amrket may be wrong, even over 10 year
periods. But the performance longer-term relative to the
cheerleading and accolades and the hopes and dreams. etc. is
unprecedented. I mean, I've never heard you say, "Hedge, this
S&P 500 is the new wave man, trust me. Everybody's
into it. It's a great security. You've got to by
some."

It appears that during it's best growth
days, over a fairly long period of time, that WFMI has
a hard time perfoming "averagely." What happens
past its best growth days. I'll tell you -- off
balance sheet manuevers, poor acquisitions, the
occassional qurterly miss (which makes your cash flow stream
less valuable), etc. And the best is yet to come...

It's pretty obvious by now that we are not going
to agree about how the WFMI stock has performed over
the long-term. We can both slice and dice the numbers
to support our respective positions depending upon
what dates we take our numbers because WFMI has had
high price volatility in its history. The only thing
I'm sure we agree about is that WFMI stock has
performed poorly since 1998 when it traded at its all time
high. Most of your arguments about poor returns have
this as its center piece. I don't think this is such a
big deal, however. Consider the following:
1. WFMI
went from $8.50 to $70 from January 1992 till March of
1998. This resulted in an incredible 6.2 year CAR of
40.5%! This is far better than the S&P 500 CAR. Do you
deny this or wish to refute it?
2. Alas WFMI was
greatly overvalued at $70 and has since fallen to
$37.25--today's closing price. This creates an 8.3 yr CAR of
19.49%. This is also significantly better than the S&P
500 CAR of 16.5% (your number last post). $10,000
invested in the S&P 8.3 years ago would have grown to
$35,522 versus $43,838 at WFMI. Do you deny this or wish
to refute it?
3. WFMI was greatly overvalued in
1998. Let us assume that today's closing price of
$37.50 was a fair price for WFMI 2 years ago. In that
case WFMI produced a 27.04% return in its first 6.2
years. Far, far better than the S&P 500.

By the
way--when did matching the S&P 500 (let alone beating it as
WFMI has done) become merely average investing? Only
10% of mutual funds beat the S&P 500 over the
long-term. I'm sure of course that the mighty Hedge is one
of those "professional" managers who consistently
beats the S&P 500. Surely he is one of the elite
10%!

Great you say! WFMI used to be a great investment but
it isn't anymore. Almost all of your negative spin
on WFMI is based upon the fall from that $70
all-time high. Is WFMI still a great growth story in view
of its poor returns? I believe it is. Why? Because
all of WFMI problems the last 18 months have to do
with non-core retail problems. There were 3 of these
problems in 1999.
1. Y2K--$550k cost--now
history.
2. Amrion--Operating earnings fell 29%, or $2
million. Poor acquisition. Now combined with
Wholefoods.com and off the income statement.
3.
Wholefoods.com--$2 million loss in 1999. Now combined with Amrion
and off the income statement.

If we take these
3 non-core retail problems away, which WFMI has
done, we see very strong trends at WFMI--strong top and
bottom line operating growth with comps at 8.9% for the
first 2 quarters of the year.

If things are so
strong at the retail end, then why aren't we seeing
greater earnings growth in 2000 over 1999? One
word--Amrion. Amrion did contribute over $5 million in
operating earnings to WFMI in 1999. These earnings have
been taken from WFMI and are now being used to support
the dot com business. This action distorts 2000
numbers. This distortion goes away in October as WFMI
anniversaries the creation of WholePeople.com.

Why are
you going to get burned if you hold your short
long-term Hedge? Because WFMI remains a powerful growth
story with their retail stores simply kicking ass! Once
that third quarter of meeting analyst earnings
expectations passes, the market is going to start focusing on
2001--$2.35 consensus estimates--22% growth rate over 2000.
2002 numbers will be produced with expected earnings
increases of 20% to 25%. WFMI is solidly back on the growth
track! 1999 and 2000 were abberations for this company
and WFMI has made brilliant moves to refocus on its
retail business by spinning WholePeople.com off with
Venture Capital investment and financial restructuring.


Our differences in opinion will be empirically tested
over time.

Hedge scorecard on 1/24 WFMI short
at $44
+18.12% (congratulations--so
far).

Hold that short long-term Hedge!

have been greatly exaggerated..."

You
think people aren't going to continue to buy lots of
stuff on the internet? You think companies aren't going
to sell lots of stuff on the internet, eventually at
a profit?

If you think e-tailing is truly
dead, I think you are kidding yourself. For now the
sector is suffering from having TOO MUCH CAPITAL thrown
at it, skewing the economics of the business (with
way too much free, or too deeply discounted). As the
flow of capital moderates, and websites stop selling
at a loss (because they no longer can afford to),
things will right themselves.

I'm not trying to
say e-commerce is a terrific short-term investment
here, but long-term the channel is here to stay for
everyone - it's simply too beneficial not
to...

(Just for example, I recently did my entire wedding
shopping for a friend in 10 minutes using an interactive
on-line bridal registry, completely displayed, chosen,
wrapped and shipped out to her doorstep in half the time
it takes just to get to the mall parking lot -
tremendous value to the customer.)

And now you're
going to tell me that, just like WFMI, you don't see
that model as being viable in the future, right?

have been greatly exaggerated..."

[should be - dumb Yahoo software]

People have always bought lots of stuff on the
internet. That's not the issue. The issue is profitability.
It is, by definition, an industry with no barriers.
Etailers sell at a loss becasue they HAVE to. The most
rotten sites will be gone or consolidated in a year or
two. The best sites will transform themsleves into
marketing data aggregators, advertsing vehicles, etc. The
sites that are part of larger retailers may continue to
serve as alternative distribution vehicles. However, in
the aggregate, overall demand is not going to explode
because of the internet. Consumption is consumption.
Thus, Amazon and others may be causing a temporary
spike in demand over and above normal growth patterns
due to their novelty, but over the long haul, their
sales are coming at the expense of a bricks and mortar
company. They have been subsidized by (what everyone now
realizes) was a speculative market that was not concerned
with business plan viability. The business plan on a
stand-alone basis never worked, and never will. In 2 years,
you may still be making purchases on AMZN, but the
market will be analyzing it as a portal or as a data
aggregator and it will make its proft some other way. There
will likely be room for several of these companies.
But there is no room for WFMI.com nor for WSM.com nor
for Fogdog.com as standalone vehicles.

The
very things that made your shopping experience so
enjoyable and economic are the things that assure that the
site will never be viable.

If anyone should know about failed internet
projects,it's the street.com and it's hired gun-Herb(known in
investment circles as Bitter Herb)Greenberg who would
downgrade his mother if there was a buck in it.Mackey made
chicken soup out of chicken s... when he moved
Amrion,raised 35 million, and protected WFMI shareholders from
future losses.It sound like they have a very slow burn
rate as they have ongoing cash flow from Amrion.I
would venture to say that Wholepeople will outlive Oats
but that's merely an opinion.Can you run a company
from prison?The shorts have an advantage because they
can lie while the longs are forced to play by the
rules.I can assure you that before WFMI shareholders will
have to eat Wholepeople losses,the shareholders will
have had Mackey neutered.What the longs need is a
strong voice who can't(or can)be bought to tell the
story.No anal-yst has the nerve to step forward and do
so.I hope Mackey,Hitt,and Sud will spread the word at
various investment conferences so as not to see the
shorts continue to erode the stock.Not that it
matters-the company seems to be doing very well.