Yes it does. Hopefully the warrants will do more catching up than the common coming down to meet it.
The original unit holders paid $10 for each share and 1 warrant and now they will have 2 warrants with a $7 exercise price. A total of 11,500,000 shares and 23 million warrants.
Realistically a lot of them will sell the common higher and then exercise their warrants at $7. That will drive the common pps down in a hurry once the warrants are fully registered and eligible for conversion imho.
If the company was to do another placement of common closer to current levels the warrants would make a huge jump because it would validate the higher value of the common.
In any event, after everything is said and done, in time, I expect the warrants will be more "normal" and trade the full difference between $7 and the common price + a premium. After all, it's like owning a $7 LEAP good until 1/16/2014.
Best of luck,
Vic