ADT Stock Jumps 15% on State Farm, Google Investments

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It’s not every day that TDA (NYSE:TDA) is spoken in the financial trading community. However, today, ADT shares are trending and rising due to investments from a couple of well-known companies. Reportedly, state farm plans to take a 15% share in ADT with an investment of $1,200 million. Not only that, but of the alphabet (NASDAQ:GOOG,NASDAQ:GOOGLE) Google promised to invest as much as $150 million in ADT.

ADT is known as a provider of home and business security systems. However, ADT also specializes in modern smart home technology. Clearly, the company’s smart home and security/risk mitigation technology capabilities caught the interest of insurance giant State Farm.

State Farm reportedly plans to invest $1.2 billion in ADT at $9 per share. With that, State Farm will acquire about 15% of ADT. In addition, State Farm has committed to investing up to $300 million in “an opportunity fund to support innovation, technology and product marketing that seeks to differentiate and improve the customer experience for homeowners.”

Additionally, State Farm will gain a seat on the ADT board of directors. That seat will likely go to State Farm Executive Vice President and COO Paul Smith.

Google’s investment is moving ADT shares

The announcement of State Farm’s large participation in ADT alone should be enough to get today’s dealers excited. However, there is another development that puts ADT on the radar of investors today.

According to the Wall Street Journal, Google had already invested 450 million dollars in ADT, so it owned 6.6% of the company. In addition, Google had previously committed $150 million to ADT “for the engineering, design, and marketing of new products.”

Now Alphabet’s Google is reportedly upping the ante by pledging up to an additional $150 million for ADT to develop those areas. Thus, Google’s total financial commitment to this “success fund,” as the press release called it, is currently $300 million.

Naturally, today’s traders are bullish on ADT’s stock. They pushed the stock price up 15% at one point this morning, easily breaking above the $8 level.

Clearly, State Farm and Google see great potential in ADT smart home and security technology. Perhaps in the coming quarters, when ADT releases its financial and operating results, investors will see the potential as well.

At the date of publication, David Moadel did not have (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to Publishing Guidelines.

David Moadel has provided compelling content, and crossed the line on occasion, on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as Chief Analyst and Market Researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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