TSMC is trading in NY under the TSM ticker priced as of now at USD 157.
In Taipei it is traded under the 2330 ticker priced today at TWD 865 (USD 26.7)
Now, TSMC's ADR (TSM) is backed by 5 shares of its primary listing on the Taipei Stock Exchange (2330.TWSE). So, the price in NY should be 26.7 x 5 = 133.5 USD.
My questions are:
1. The difference between 133.5 and 157 is just the risk premium of having the stock in an unfavorable location with a more difficult access?
2. Considering that we are talking about the same company, why there is no arbitrage? Especially from the ADR provider.
3. If something very bad would happen to Taiwan, TSMC (stock) would be affected in the same manner no matter where it is traded, right? (I am thinking about extreme scenario: total destruction. Or I could think about a very positive scenario where substantial dividends are being paid).
4. Am i missing something that makes my calculation above wrong?
Thanks.