What happened

Even while shares of Bed Bath & Beyond (BBBY) continued to crash today, fellow short squeeze stock Party City (PRTY) was holding strong. The party-themed retailer continued to move higher on an apparent short squeeze this morning.

As of 11:09 a.m. ET, the stock was up 6.8% after gaining as much as 30% earlier in the session. Bed Bath & Beyond, on the other hand, was down 10% as that short squeeze continued to blow up in the aftermath of Ryan Cohen's decision to sell all his shares in the stock.

So what

Party City was continued to only get a fraction of the attention that meme stocks like Bed Bath & Beyond and AMC Entertainment were getting on Reddit's WallStreetBets, but traders on Twitter and other platforms continued to pump up the stock.

With Bed Bath & Beyond and AMC were both down sharply today, Party City could be receiving increased attention by meme traders looking for the next short squeeze target. Indeed, trading in Party City was at high volume, with more than 21 million shares changing hands before noon, already five times its daily average, a potential indicator of a short squeeze.

That also put it on track for its highest-volume day in months. As of July 29, 18% of the float had been sold short, and the retailer has a number of things in common with the most popular meme stocks, including weak fundamentals, a low share price, a well-known brand, and a relatively high short interest.

Now what

After Party City stock rallied 48% last week, traders seem to believe that it has more room to run. Fundamentally, the company is burdened by a heavy debt load, which has made it hard for it to execute its turnaround plans. Meme stocks like GameStop and AMC were able to use the gains in their stocks to sell new shares, however, and a secondary offering at a higher share price could help bail out Party City.

At this point, that may be the best hope for Party City to mount a turnaround, but the stock will still have to deliver significantly gains from here, as it has net debt of $1.54 billion and a market cap of less than $300 million, meaning the equity is still worth little compared to what it owes.