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© REUTERS/Jim Young/File Photo
A sign is seen outside a GameStop store in Niles, Illinois, U.S. May 23, 2016.
A surge in GameStop Corp. and other heavily-shorted U.S. stocks has investors targeting some Australian names with large amounts of bearish bets.

Investors are snapping up companies that have a high short interest as a percentage of equity float after the U.S. video game retailer became a flash point between short sellers and retail traders. Some of Australia's most-shorted stocks like travel firm Webjet Ltd. and funeral-home operator InvoCare Ltd. are among the top performers on the benchmark S&P/ASX 200 Index on Thursday.

The gains in Australia follow massive rallies in U.S. companies that were hyped up by day traders on Reddit, and had burned hedge funds that had sold those stocks short. Some European shares with high short interest also jumped overnight, like Unibail-Rodamco-Westfield. Sydney-listed shares of the mall landlord rose as much as 18% on Thursday.

Webjet, one of Australia's most-shorted stocks with 15.23% of its equity float in bearish wagers, according to Australian Securities & Investments Commission data, was up as much as 5.4%. Salmon farmer Tassal Group Ltd., with short interest of 13.6%, soared as much as 7.1%. Poultry firm Inghams Group Ltd. and InvoCare also rose, with bear bets of 9.62% and 8.11% respectively.
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© Australian Stock Exchange
Member ranked returns for ASX 200
Member ranked returns for ASX 200The stocks outperformed Australia's benchmark, which plunged as much as 2.7% amid a broad sell off in global markets.

The GameStop frenzy also spurred an apparent case of mistaken identity in Australia -- miner GME Resources Ltd., which shares a similar ticker to the U.S. retailer, skyrocketed as much as 60% earlier on Thursday. Trading volume in the stock was about 1,700% of its three-month average, according to data compiled by Bloomberg.