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Movie theater chain AMC Entertainment (NYSE:AMC) has had a busy few weeks. First, the Reddit favorite abandoned its request that its shareholders approve the issuance of 25 million new shares. Then, AMC announced that CEO Adam Aron would also become its chairman, replacing an executive at billionaire-controlled Dalian Wanda Group. Both of these news items led to spikes by AMC stock.

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But the company’s situation has not really changed substantially in the last few months. Yet, time after time, Redditors have forced analysts like me to eat humble pie as its shares kept climbing.

Even though AMC stock is not a viable long-term investment, there’s a good chance that the shares will climb again soon. Plus, now that the economy has opened up and people are going back to theaters, things are looking progressively better for movie theater chains like AMC.

Still, because AMC has  weak fundamentals and a bleak outlook, while concerns about the hyper-contagious Delta variant are growing, only a fearless investor would risk allocating a substantial amount of money to buying AMC stock.

Reddit Is Fully in Control of AMC Stock

As I mentioned in my introduction, two news items have been pushing AMC  stock upward in recent weeks. Both of these illustrate how deep the link between Reddit and AMC has become. First, let’s talk about the company’s decision to give its CEO, Adam Aron, the chairman title as well.

In a July 21 press release, AMC announced that Lincoln Zhang and John Zeng, employees of the Beijing investment firm Dalian Wanda Group, had resigned from the board. The pair had stated that they intended to step down from the panel in May.

Following the resignations, the board named Aron, who’s been AMC’s president and CEO since 2016, as chairman. The firm also tapped Philip Lader as its  lead director. Lader  is a senior advisor to Morgan Stanley (NYSE:MS), which helped AMC carry out a $500 million stock offering earlier this year. The markets reacted positively to the changes on the board.

Adam Aron is known to millions of retail traders as “Silverback.” While AMC continues to lose money, Aron has remained upbeat on AMC’s earning calls, often thanking millions of Redditors and Robinhood (NASDAQ:HOOD) traders who boosted the company’s stock earlier this year.

AMC has also canceled a proposal that would have asked its shareholders to allow the movie theater chain to issue up to 25 million more shares. Reddit users in the r/AMCstock channel applauded the movie theater chain’s decision to nix the vote.

“It’s no secret I think shareholders should authorize 25 million more AMC shares. But what YOU think is important to us. Many yes, many no,” Aron tweeted, alongside an image with the phrases “I see you, I hear you, I value you.”

The Fundamentals Remain Weak

AMC’s annual shareholder meeting will be held later today, and its next earnings release is expected in early August. Both of these events will give us a clearer picture of where the company is at the moment and its outlook. However, no one should expect a quick turnaround.

Now that almost half the U.S. population is vaccinated, there is hope that movie theaters will gain momentum once again. But just as the box office hit its stride, the delta variant emerged. Public health officials are closely monitoring the spread of the highly contagious variant. Delta has recently driven a surge in cases in communities with low vaccination rates.

AMC, however, has been struggling for awhile. Its woes predate the pandemic and have more to do with a drastic change in how we consume content. It is a non-cyclical trend that was only amplified by the pandemic.

Over the last three years, AMC’s sales have dropped 56.3%, while its net margins are deep in the red. The company’s only positive is its cash reserves. Management decided to exploit the Reddit-induced rally by raising a ton of capital through selling stock.

Earlier this month, Aron announced that the company had signed two long-term leases at luxury shopping malls in the Los Angeles area. There isn’t much information regarding what else the company will do with the cash it has raised. Regardless, the ways in which AMC uses this capital will be a key factor in determining the long-term prospects of its business.

The rise of Netflix (NASDAQ:NFLX) and other streaming giants has made it crystal clear that the cinema industry will have to make drastic changes to its operating model.

It’s Been Hard to Fight the Reddit Users

Considering that institutions seem to have very little interest in AMC, I think that  retail investors are likely to continue to control the stock for some time. AMC, however, will continue to limp along with its weak fundamentals and weak outlook.

But it is telling that, despite the robust interest in the name among retail investors, Wanda Group, the investment firm that previously had a controlling interest in AMC, had sold nearly all of  its AMC stake as of the end of May.

Clearly, Wanda knows that AMC is struggling. But betting against AMC is like betting against WallStreetBets at the moment. Time and again, the Reddit users have demonstrated their resilience. Fighting them, therefore, is a tough endeavor.

On the date of publication, Faizan Farooque 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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.