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Cash flow is already tight, but they are spending money to buy a business that makes lower profit than their current one. This is not expansion, it is moving into a lower-return business and increasing financial risk.
The market only pays for proven, repeatable earnings. It's like someone who's been broke for years suddenly earning one month of income, that doesn't mean they've turned their life around. Only when people believe they can earn consistently every month will anyone be willing to "invest" at a higher price. That trust takes time to rebuild, one good quarter won't send the stock flying.
