Morgan Stanley Finance LLC Step Down Trigger Autocallable Notes
Linked to the Least Performing Underlying among the Russell 2000® Index, the S&P 500® Index and the EURO STOXX 50® Index due July 24, 2029
Fully and Unconditionally Guaranteed by Morgan Stanley
Principal at Risk Securities
These Trigger Autocallable Notes (the “Securities”) are unsecured and unsubordinated debt obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The Securities provide a return based on the least performing underlying among the Russell 2000® Index (the “RTY Index”), the S&P 500® Index (the “SPX Index”) and the EURO STOXX 50® Index (the “SX5E Index,” and together with the RTY Index and the SPX Index, the “Underlyings”). If the Index Closing Value of each of the RTY Index, the SPX Index and the SX5E Index (each, an “Underlying”) on any quarterly Observation Date beginning July 25, 2025 (the “Observation Date Closing Value”) is equal to or greater than (i) its respective Initial Underlying Value on any of the first sixteen quarterly Observation Dates (beginning after one year) or (ii) its respective Downside Threshold on the Final Observation Date, MSFL will automatically call the Securities and pay the principal amount of the Securities plus a Call Return that will vary depending on the Observation Date and will reflect a fixed Call Return Rate on a per-annum basis. However, if the Securities are not called, and therefore the Final Underlying Value of at least one of the RTY Index, the SPX Index or the SX5E Index is less than its respective Downside Threshold, MSFL will pay you significantly less than the full principal amount, if anything, at maturity, resulting in a loss on your principal amount that is proportionate to the full decline in the value of the Underlying with the largest percentage decrease from its Initial Underlying Value to its Final Underlying Value (the “Least Performing Underlying”), even if the other Underlyings appreciate or do not decline as much. Investors will not participate in any appreciation of the Underlyings. These long-dated Securities may be appropriate for investors who are willing to risk their entire principal at maturity and are willing to forego current income in exchange for the possibility of receiving the Call Return prior to or at maturity, if the Index Closing Value of each of the Underlyings is at or above its respective Initial Underlying Value as of one of the first sixteen quarterly Observation Dates (beginning after one year), or, if the Securities have not been called prior to maturity, if the Final Underlying Value of each of the Underlyings is greater than or equal to its respective Downside Threshold. Because all payments on the Securities are based on the least performing underlying among the RTY Index, the SPX Index and the SX5E Index, the fact that the Securities are linked to three Underlyings does not provide any asset diversification benefits and instead means that a decline in the value beyond the relevant Downside Threshold of any of the RTY Index, the SPX Index or the SX5E Index will result in a loss of a significant portion or all of your investment, even if the other Underlyings appreciate or do not decline as much. Investing in the Securities involves significant risks. The Issuer will not automatically call the Securities following any of the first sixteen quarterly Observation Dates (beginning after one year) if the Observation Date Closing Value of any of the Underlyings is below its respective Initial Underlying Value. You will lose a significant portion or all of your principal amount at maturity if the Securities are not called prior to or at maturity and therefore the Final Underlying Value of at least one of the Underlyings is below its Downside Threshold. Generally, the higher the Call Return Rate for the Securities, the greater the risk of loss on those Securities. The Downside Thresholds are observed only on the Final Observation Date and the contingent downside market exposure applies at maturity; if you sell the Securities prior to maturity, you may receive substantially less than the principal amount even if the value of each of the Underlyings is greater than its respective Downside Threshold at the time of sale.
All payments are subject to our credit risk. If we default on our obligations, you could lose a significant portion or all of your investment. These Securities are not secured obligations and you will not have any security interest in, or otherwise have any access to, any underlying reference asset or assets.
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❑Automatically Callable: MSFL will automatically call the Securities and pay you the principal amount plus a Call Return if (i) the Observation Date Closing Value of each of the RTY Index, the SPX Index and the SX5E Index on any of the first sixteen quarterly Observation Dates beginning July 25, 2025 is equal to or greater than its respective Initial Underlying Value, or (ii) the Observation Date Closing Value of each of the Underlyings on the Final Observation Date is equal to or greater than its respective Downside Threshold. If the Securities are called on any quarterly Observation Date, no further payments will be made on the Securities. The Call Return will vary depending on the Observation Date and will reflect a fixed Call Return Rate on a per-annum basis. If the Securities are not called, investors will have the downside equity market risk of the Least Performing Underlying at maturity.
❑Contingent Downside Market Exposure at Maturity: If the Securities are not automatically called, and the Final Underlying Value of at least one of the RTY Index, SPX Index or the SX5E Index will therefore necessarily be less than its respective Downside Threshold, and MSFL will repay less than the principal amount, if anything, at maturity, resulting in a significant loss on your principal amount that is proportionate to the full decline in the value of the Least Performing Underlying from the Trade Date to the Final Observation Date. The Downside Thresholds are observed only on the Final Observation Date and the contingent downside market exposure applies at maturity. If you are able to sell the Securities prior to maturity, you may receive substantially less than the principal amount even if the value of each of the Underlyings is greater than its respective Downside Threshold at the time of sale. Any payment on the Securities is subject to our creditworthiness.
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Trade Date
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July 19, 2024
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Settlement Date
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July 24, 2024 (3 business days after the Trade Date)
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Observation Dates
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Quarterly, beginning July 25, 2025. See “Observation Dates, Call Settlement Dates, Call Returns and Call Prices” on page 5 for details.
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Final Observation Date**
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July 19, 2029
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Maturity Date**
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July 24, 2029
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* Expected. In the event that we make any change to the expected Trade Date and Settlement Date, we may change the Observation Dates, the Final Observation Date and/or the Maturity Date so that the stated term of the Securities remains the same.
** Subject to postponement in the event of a Market Disruption Event or for non-Index Business Days. See “Postponement of Determination Dates” in the accompanying product supplement.
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NOTICE TO INVESTORS: THE SECURITIES ARE SIGNIFICANTLY RISKIER THAN CONVENTIONAL DEBT INSTRUMENTS. THE SECURITIES DO NOT GUARANTEE THE REPAYMENT OF THE FULL PRINCIPAL AMOUNT AT MATURITY, AND THE SECURITIES WILL HAVE DOWNSIDE MARKET RISK SIMILAR TO THE LEAST PERFORMING OF THE THREE UNDERLYINGS, SUBJECT TO THE RESPECTIVE DOWNSIDE THRESHOLDS AT MATURITY. THIS MARKET RISK IS IN ADDITION TO THE CREDIT RISK INHERENT IN PURCHASING OUR DEBT OBLIGATIONS. YOU SHOULD NOT PURCHASE THE SECURITIES IF YOU DO NOT UNDERSTAND OR ARE NOT COMFORTABLE WITH THE SIGNIFICANT RISKS INVOLVED IN INVESTING IN THE SECURITIES. THE SECURITIES WILL NOT BE LISTED ON ANY SECURITIES EXCHANGE.
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED UNDER “KEY RISKS” BEGINNING ON PAGE 7 BEFORE PURCHASING ANY SECURITIES. EVENTS RELATING TO ANY OF THOSE RISKS, OR OTHER RISKS AND UNCERTAINTIES, COULD ADVERSELY AFFECT THE MARKET VALUE OF, AND THE RETURN ON, YOUR SECURITIES. YOU MAY LOSE A SIGNIFICANT PORTION OR ALL OF YOUR PRINCIPAL AMOUNT.
This preliminary pricing supplement relates to Securities linked to the least performing underlying among the Russell 2000® Index, the S&P 500® Index and the EURO STOXX 50® Index. The Securities are offered at a minimum investment of $1,000 in denominations of $10 and integral multiples thereof.
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Underlying
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Initial Underlying Value
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Downside Threshold
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Call Return Rate*
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CUSIP
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ISIN
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Russell 2000® Index
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70% of the Initial Underlying Value
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At least 9.75% per annum
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61776P173
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US61776P1738
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S&P 500® Index
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70% of the Initial Underlying Value
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EURO STOXX 50® Index
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70% of the Initial Underlying Value
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* The actual Call Return Rate will be determined on the Trade Date. If the Securities are called, the Call Price will be a fixed amount based on the Call Return with respect to each Observation Date. See “Observation Dates, Call Settlement Dates, Call Returns and Call Prices” on page 5.
See “Additional Information about Morgan Stanley, MSFL and the Securities” on page 2. The Securities will have the terms set forth in the accompanying prospectus, product supplement and index supplement and this preliminary pricing supplement.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these Securities or passed upon the adequacy or accuracy of this preliminary pricing supplement or the accompanying product supplement, index supplement or prospectus. Any representation to the contrary is a criminal offense. The Securities are not deposits or savings accounts and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency or instrumentality, nor are they obligations of, or guaranteed by, a bank.
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Estimated value on the Trade Date
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Approximately $9.755 per Security, or within $0.40 of that estimate. See “Additional Information about Morgan Stanley and the Securities” on page 2.
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Price to Public
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Underwriting Discount(1)
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Proceeds to Us(2)
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Per Security
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$10.00
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$0.175
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$9.825
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Total
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$
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$
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$
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We are also offering, pursuant to Preliminary Pricing Supplement No. 2,994, a separate issuance of securities, being sold only to fee-based advisory accounts, with terms substantially similar to, but somewhat different than, those of this issuance.
(1)UBS Financial Services Inc., acting as dealer, will receive from Morgan Stanley & Co. LLC, the agent, a fixed sales commission of $0.175 for each Security it sells. For more information, please see “Supplemental Plan of Distribution; Conflicts of Interest” beginning on page 27 of this preliminary pricing supplement.
(2)See “Use of Proceeds and Hedging” on page 27.
The agent for this offering, Morgan Stanley & Co. LLC (“MS & Co.”), is our affiliate and a wholly owned subsidiary of Morgan Stanley. See “Supplemental Plan of Distribution; Conflicts of Interest” on page 27 of this preliminary pricing supplement.
Morgan Stanley UBS Financial Services Inc.