Shares of embattled theatre chain operator AMC Entertainment (NYSE:AMC) are ticking in the green again following its announcement of debt restructuring. However, these fleeting gains do little to impact the bearish outlook for AMC stock, which is overshadowed by its declining underlying business. AMC stock remains as precarious as ever, potentially sending its shareholders into dizzying headaches. Therefore, AMC is a no-brainer stock to sell, which will continue to erode shareholder value for the foreseeable future.

In May, after being off the radar for almost three years, Keith Gill, known as Roaring Kitty, triumphantly returned to X (formerly Twitter). Unsurprisingly, his return led to an explosive rally in meme stocks like AMC. AMC stock, in particular, surged over 110% from May 13 to May 14, only to slip back into the red shortly afterward.

Hence, AMC’s meme status has lost its edge, which is arguably the most noteworthy event for the business in the past few years. It now finds itself navigating a testing business environment with a massive debt load that could push it to insolvency.

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AMC’s Debt Restructuring: A Desperate Lifeline?

AMC recently unveiled its plans to restructure roughly $4.5 billion of its debt load as it looks to extend maturities on more than 50% of its existing liabilities.  In doing so, it will issue $1.2 billion in new-term loans and $414 million in exchangeable notes.  The goal is to push back on the looming $2.8 billion debt maturities in 2026.

To give the devil its due, AMC has done well in cashing in on the meme stock frenzy and managing its debt load over the past few years. Its net debt pay-down yield, which measures the debts it has paid down in relation to its market capitalization, stands at an impressive 57%. Moreover, its outstanding share count has risen by 72% over the past three years. Just this May, it raised $250 million in new equity to pounce on the retail trading mania.

However, surprisingly, despite its massive debt, that’s not the primary issue impacting AMC’s business. It’s actually the stagnation in top-and-bottom-line growth over the past several years that’s truly troubling. In fact, the 3-year change in its long-term debt is at a negative 17%. In contrast, its revenue growth per share over the same period is at a negative 18.4%. Also, its median 10-year net margin is at a deplorable negative 5.4%.

Streaming Rivals and Box Office Blues

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The entertainment world has undergone a seismic change over the past few years. Gone are the days of packed cinema halls, with Netflix (NASDAQ:NFLX) and chill reigning supreme. Hence, with such dynamics in play, AMC finds itself at a crossroads and at the mercy of big-ticket films to drive its business. To complicate things further, these potential box office blowouts are few and far between.