- Israel-based Check Point Software plunges about 8 percent.
- Traders were reacting to weaker third-quarter guidance.
- The CEO blamed the Yom Kippur Jewish holiday for the weak forecast.
Shares of Israel-based Check Point Software fell throughout the day Thursday despite a solid earnings report for the second quarter.
The shares of the cybersecurity software company dropped 7.8 percent during afternoon trading in New York.
The main reason for the plunge is that guidance for the current quarter is not what Wall Street analysts were hoping for. The company also saw lower-than-expected volume in deals with larger clients.
But if you dig deeper into the report you'll see the company's co-founder and CEO, Gil Shwed, is blaming Yom Kippur, the Jewish Day of Atonement, for the lower third-quarter guidance. The 25-hour fast, the holiest day on the Jewish calendar, happens to fall on the last day of the company's third-quarter book.
That means the company's Israel offices will be closed, and they will also close early the day before Yom Kippur. Shwed told analysts the company does a large part of its sales at the end of each quarter, but because of the holiday they're trying to get sales teams and customers to finish their business before the start of Yom Kippur, sundown on Sept. 29.
In a research note after the conference call, Cowen & Co. said the Yom Kippur excuse was "legitimate." They believe the timing of the holiday could shave $30 million off the company's bottom line in the third quarter.
Investors have grown accustomed to retailers blaming warm weather for slow winter clothing sales, or agriculture companies blaming heat or cold for weak numbers and even companies who blamed slow business on the 2016 election countdown. But this is probably the first time a company has warned investors that a Jewish holiday will get in the way of quarterly numbers.