The popular arbitrage trade involving Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is causing unexpected pain as the U.S. stock premium over its Taiwanese counterpart reaches a 15-year high. What Happened: The premium of TSMC’s American depositary receipts over its Taiwan stock has surged to 22% this quarter, the highest average since 2009, Bloomberg reported on Monday. This surge is attributed to the U.S.’s growing enthusiasm for artificial intelligence. Despite a 66% increase in ADRs and a 53% rise in Taipei shares this year, both are still trading below their 2021 valuation highs. The …
