Boosted by two very popular movies and and high revenue per customer, AMC (NYSE:AMC) was able to generate more revenue than in Q3 of 2019. But the company’s bottom line was still negative, while its cash flow amounted to a trickle. Also, the movie-theater owner depressed the price of AMC stock by selling huge amounts of new shares in both September and November.

With AMC still burdened by huge debt and continuing to face very tough competition from streaming channels, this pattern probably will continue for the foreseeable future if not forever.

Q3 Was Much Better But Not Great

AMC’s revenue, lifted by the success of the Barbie and Oppenheimer movies, jumped 45% versus the same period a year earlier to $1.4 billion, the company reported on Nov. 8. Further, its sales came in higher last quarter than in the same period of 2019. That was before the pandemic shut down movie theaters, a blow from which theaters have yet to fully recover.

As evidence of the latter statement, consider that last quarter, even with the help of Barbie and Oppenheimer, attendance at AMC’s theaters was 16% lower than in Q3 of 2019. The firm’s top line was only higher last quarter than in Q3 of 2019 because it got 30% more revenue per customer than in Q3 of 2019.

But despite the higher prices that it charged and the popularity of Barbie and Oppenheimer, AMC still reported a per-share loss of 9 cents, excluding certain items,. It generated only $65.9 million of cash from its operations. And excluding its net proceeds of $293 million from selling stock, its overall cash flow was just $1 million.

If the highly indebted company can’t really generate cash, aside from the amounts that it obtains from selling stock, during a “good” quarter, it’s going to have to keep selling many more shares to stay afloat. And as we’ll see in the next section, selling huge amounts of shares depresses the price of AMC stock.

AMC’s Share Sales

One day after AMC announced its Q3 results, the movie-theater owner disclosed that it would offer up to $350 million of its shares. And in September, the company generated gross proceeds of $325 million by selling shares.

AMC needs to sell large amounts of its shares because, as we’ve seen, even during good quarters, it can’t generate significant amounts of cash except by selling stock. And the company still has a huge net debt total of $5.7 billion.

As a result, it’s paying a great deal of interest; in Q2 and Q3, respectively, it paid $134.7 million and $78 million of interest. If it misses any required interest payments, it could easily force it into bankruptcy.

So because it has high interest costs and its business is not generating much cash, it has to carry out stock sales to make its interest payments.

But the downside to stock sales is that they tend to push share prices down. Indeed, during the three months that ended on Nov. 13, AMC’s shares sank 76%.

No Way Out of the Cycle

The high popularity of streaming is clearly still keeping a lid on AMC’s top and bottom lines, forcing it to sell stock to meet its interest obligations. And those stock sales, in turn, push down the company’s share price.

It doesn’t appear that AMC has a means of breaking that pattern. The stock is likely doomed to keep sinking for many years to come.

On the date of publication, Larry Ramer 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.