Analysts are not permitted to convey information, or their opinion of that information, to any Merrill Lynch trader, institutional investor or any specific person until the analyst has made such information available to all of Merrill Lynch's clients. We learn a number of things about the way analysts operate, among them being that Merrill's analysts do communicate with individual clients before making their comments known publicly. I don't really care about Blodget's private discussions when he was apparently under house orders to be quiet, or about his cynical comments regarding his role in a profession that deserves cynical treatment. I don't expect analysts to withhold their thoughts from their richest clients until they can be known to the lumpenproletariat, and if Merrill Lynch wants to misrepresent how the system really works to the SEC, I've no doubt that the SEC commissioners aren't as gullible as Merrill seems to think. The broader issue, which is demonstrated magnificently in the Post article, is that the entire method of analyst conversations with companies is designed to purposefully hide the truth from the public, rather than help reveal it.
Investors also like a company to beat forecasts.
The stock jumps, and everyone but the short sellers are happy. So on stocks such as Amazon, Blodget keeps a private model, too. This one doesn't incorporate feedback from the company. It's more speculative. So Blodget is willing to admit that he alters his publicly made comments to serve the companies he covers.