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Prospectus Supplement No. 3 Registration No. 333-41753
to Prospectus dated February 11, 1998 Rule 424(b)(3)Prospectus
$150,000,000 5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
AND
2,882,635 SHARES OF COMMON STOCK
CELLSTAR CORPORATION
This Prospectus Supplement supplements information contained in that
certain Prospectus of CellStar Corporation, a Delaware corporation (the
"Company"), dated February 11, 1998, as supplemented by that certain
Prospectus Supplement No. 1, dated February 20, 1998, and that certain
Prospectus Supplement No. 2, dated March 18, 1998 (as supplemented, the
"Prospectus"), relating to the offer and sale (the "Offering) by certain
selling securityholders (the "Selling Securityholders") of (i) up to
$150,000,000 aggregate principal amount of 5% Convertible Subordinated Notes
due 2002 (the "Notes") of the Company, (ii) up to 2,710,761 shares (subject
to adjustment) of Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company issuable upon conversion of the Notes and (iii) up to
171,874 shares of Common Stock currently held by a Selling Securityholder.
This Prospectus Supplement is not complete without, and may not be delivered
or utilized except in connection with, the Prospectus, including any
amendments or supplements thereto. Capitalized terms used but not defined
herein have the meanings assigned to such terms in the Prospectus.
The following table amends and supplements the information set forth in
the Prospectus in the table under the caption "Selling Securityholders" with
respect to the named Selling Securityholder and (i) the amount of Notes owned
by the named Selling Securityholder (assuming no Notes have been sold since
the date on which such securityholder provided such information to the
Company), (ii) the maximum amount of Notes which may be offered for the
account of such Selling Securityholder under the Prospectus, as amended and
supplemented, (iii) the amount of Common Stock owned by such Selling
Securityholder (assuming no shares of Common Stock have been sold since the
date on which such securityholder provided such information to the Company)
and (iv) the maximum amount of Common Stock which may be offered for the
account of such Selling Securityholder under the Prospectus, as amended and
supplemented.
<TABLE>
Principal
Amount of Principal Common
Notes Owned Amount of Stock Owned Common Stock
Name of Selling Prior to Notes Offered Prior to Offered Hereby
Securityholder (1) Offering Hereby Offering (2) (3)
- - ------------------ ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Bear, Stearns &
Co., Inc. (4) $12,715,000 $12,715,000 229,782 229,782
</TABLE>
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(1) The information set forth herein is as of March 26, 1998.
(2) Includes the shares of Common Stock into which the Notes held by such
Selling Securityholder are convertible at the initial conversion price.
The conversion price and the number of shares of Common Stock issuable
upon conversion of the Notes are subject to adjustment under certain
circumstances. See "Description of Notes -- Conversion of Notes."
Accordingly, the number of shares of Common Stock issuable upon conversion
of the Notes may increase or decrease from time to time.
(3) Assumes conversion into Common Stock of the full amount of Notes held by
the Selling Securityholder at the initial conversion price and the offering
of such shares by such Selling Securityholder pursuant to the Registration
Statement of which this Prospectus forms a part. The conversion price and
the number of shares of Common Stock issuable upon conversion of the Notes
are subject to adjustment under certain circumstances. See "Description of
Notes -- Conversion of Notes." Accordingly, the number of shares of Common
Stock issuable upon conversion of the Notes may increase or decrease from
time to time. Fractional shares will not be issued upon conversion of the
Notes; rather, cash will be paid in lieu of fractional shares, if any.
(4) Bear, Stearns & Co., Inc. ("Bear") was an Initial Purchaser in the private
placement of the Notes. Mr. Sheldon I. Stein, a member of the Board of
Directors of the Company, is a Senior Managing Director of Bear. Bear has
provided investment banking services to the Company in the past year, and
it is anticipated that it will continue to provide such services in the
current year.
The date of this Prospectus Supplement is March 26, 1998.
