AMC Entertainment (NYSE:AMC) stock has experienced mixed news of late. On the downside, a reputable investment fund has reportedly sold its entire stake in the company.

However, on the positive side, an analyst predicts potential growth for AMC based on anticipated box-office revenues.

AMC Entertainment has gained attention from meme-stock traders and enthusiasts, known as “apes.” Many retail investors and traders may seem to feel that there are potential reasons to consider a small investment in the company.

Let’s explore why this may not be the case, at least for long-term buy-and-hold investor types.

Bridegwater Associates Sold All Its AMC Stock

Famous billionaire Ray Dalio’s Bridgewater Associates reportedly held $261,000 worth of AMC Entertainment shares in 2022. However, a recent filing indicates that Bridgewater Associates completely sold its position in AMC stock during the first quarter of this year. The reasons behind this decision remain unknown.

Long-term shareholders of AMC Entertainment have experienced disappointing returns since the decline of the meme-stock phenomenon in 2021.

It is plausible that Dalio explored more promising investment prospects. Dalio may not have been enthusiastic about AMC Entertainment’s venture into gold and silver mining, as the company made an unexpected investment of $27.9 million in Hycroft Mining (NASDAQ:HYMC) last year.

Price Action Is Mixed

AMC stock has been highly volatile this year, which should be no surprise to investors who have followed this company in recent years. AMC experienced a trough-to-peak surge of approximately 93% in late-February.

Interestingly, despite giving up most of these gains, AMC stock has actually outperformed the market (at the time of writing), suggesting bulls have outsmarted bears, at least over the short-term.

However, there are reasons for investors to be wary of these short-term returns. Over the past two years, AMC stock has lost more than 90% of its value (albeit from an inflated meme-stock era). Thus, this is really a stock that’s more of a trading mechanism than an investment, for most. 

Depending on one’s time horizon, and willingness to make highly-volatile bets on momentum (one way or the other), perhaps there’s a reason to consider AMC stock, as a sort of volatility play.

However, for most conservative long-term investor types, this business’ declining fundamentals don’t support much of a bullish narrative. At least, not right now.

What Now?

AMC stock has been losing ground in recent weeks, falling below its 50-day moving average. All indications are that this stock is in a defined downtrend.

For those who believe in technical analysis, this means that there’s little to suggest any sort of upside, at least in the near-term, is likely. That’s not good, as far as momentum plays are concerned.

Until the tied turns, there really isn’t any reason any investor should be in this stock, in my view. The theater business is a difficult one, and is far from the cash flow-producing business it once was.

Whether or not new blockbuster hits come out, I don’t see a realistic path to foot traffic growth, given the impressive nature of streaming and at-home entertainment options available to consumers.

Personally, I’m the type that would rather wait a month and pay $20 to stream the latest blockbuster than go to the theater for overpriced popcorn and the honor of having my seat kicked.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.