<PAGE>
Prospectus Supplement No. 1 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 (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 Securityholders and (i) the amount of Notes
owned by the named Selling Securityholders (assuming no Notes have been sold
since the date on which such securityholders provided such information to the
Company), (ii) the maximum amount of Notes which may be offered for the
account of such Selling Securityholders under the Prospectus, as amended and
supplemented, (iii) the amount of Common Stock owned by such Selling
Securityholders (assuming no shares of Common Stock have been sold since the
date on which such securityholders provided such information to the Company)
and (iv) the maximum amount of Common Stock which may be offered for the
account of such Selling Securityholders under the Prospectus, as amended and
supplemented.
<TABLE>
<CAPTION>
Principal
Amount of Principal Common Stock
Name of Selling Notes Owned Amount of Owned Prior Common Stock
Securityholder Prior to Notes Offered to Offering Offered Hereby
(1) Offering Hereby (2) (3)
---------------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Shepard
Investments
International
Ltd. (4) $27,450,000 $27,450,000 496,069 496,069
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<CAPTION>
Principal
Amount of Principal Common Stock
Name of Selling Notes Owned Amount of Owned Prior Common Stock
Securityholder Prior to Notes Offered to Offering Offered Hereby
(1) Offering Hereby (2) (3)
---------------- ------------ ------------- ------------ --------------
<S> <C> <C> <C> <C>
Stark
International (5) $5,125,000 $5,125,000 92,617 92,617
Swiss Bank
Corporation-
London Branch (6) $1,000,000 $1,000,000 18,071 18,071
</TABLE>
(1) The information set forth herein is as of (i) February 6, 1998 for Swiss
Bank Corporation-London Branch and (ii) February 18, 1998 for each of
Shepard Investments International Ltd. and Stark International.
(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) Staro Asset Management, L.L.C. is the investment manager for Shepard
Investment International Ltd. and has the power to vote and dispose of such
securities.
(5) Staro Asset Management, L.L.C. is the general partner of Stark
International and has the power to vote and dispose of such securities.
(6) SBC Warburg Dillon Read Inc. is the investment advisor for Swiss Bank
Corporation-London Branch and has the power to vote and dispose of such
securities.
The date of this Prospectus Supplement is February 20, 1998
