Reading this news about the valuation of airbnb makes me wonder.
Silver Lake and Sixth Street received warrants that can be exercised at an \$18 billion valuation, below the \$26 billion Airbnb was valued in early March in its internal valuation, one source said.
So, that means the real valuation of AirBnb is higher, or lower than 18billion?
Let's assume Airbnb is traded on public market, and the conversion price is \$18/share. Currently, Airbnb should typically be traded above or below \$18/share?
I assume below because if now AirBnb is at \$19, investor will just convert at \$18 and make \$1 immediately?
But when I research convertible bond, it seems like the company can "call the bond" at a certain price too. Then, typically, the "call price" (sorry if't the wrong terminology) should be a different price from the investors "exercise price"? Should that be higher or lower than the stock price?
To rephrase my question, if it's a public company issuing convertible bond, typically the conversion price should be higher than current stock price, right?
[EDIT] for clarify, this might not be not a convertible bond. But it surely looks like one. so I am just asking hypothetically, what would it actually value airbnb at.
Sorry for the basic question, just trying to understand how convertibles work..