Enhanced Buffered Jump Securities Based on the Value of the Worst Performing of the Dow Jones Industrial AverageSM and the S&P 500® Index due August 14, 2028
Fully and Unconditionally Guaranteed by Morgan Stanley
Principal at Risk Securities
The Enhanced Buffered Jump Securities, which we refer to as the securities, are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed by Morgan Stanley. The securities have the terms described in the accompanying product supplement for Jump Securities, index supplement and prospectus, as supplemented and modified by this document. The securities pay no interest and will instead pay an amount in cash at maturity that may be greater than or less than the stated principal amount, depending on the closing values of the underlying indices on the valuation date. If the final index value of each underlying index is greater than or equal to 80% of its respective initial index value, which we refer to as the respective downside threshold value, you will receive for each security that you hold at maturity a minimum of the upside payment of $430 per security in addition to the stated principal amount. If each underlying index appreciates by more than 43.00% over the term of the securities, you will receive for each security you hold at maturity the stated principal amount plus an amount based on the percentage increase of the worst performing underlying index. However, if the final index value of either underlying index is less than its respective downside threshold value, you will be exposed to the decline in the level of the worst performing underlying index beyond the buffer amount of 20%, and you will lose some or a significant portion of your initial investment. The payment at maturity may be significantly less than the stated principal amount, and you could lose up to 80% of your investment. Because the payment at maturity on the securities is based on the worst performing of the underlying indices, a decline in either final index value below 80% of its respective initial index value will result in a loss on your investment, even if the other underlying index has appreciated or has not declined as much. These long-dated securities are for investors who seek an equity index-based return and who are willing to risk their principal, risk exposure to the worst performing of two underlying indices and forgo current income in exchange for the upside payment and buffer features that in each case apply to a limited range of performance of the worst performing underlying index. The securities are notes issued as part of MSFL’s Series A Global Medium-Term Notes Program.
All payments are subject to our credit risk. If we default on our obligations, you could lose some 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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FINAL TERMS
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Issuer:
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Morgan Stanley Finance LLC
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Guarantor:
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Morgan Stanley
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Issue price:
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$1,000 per security
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Stated principal amount:
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$1,000 per security
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Pricing date:
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August 9, 2022
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Original issue date:
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August 12, 2022 (3 business days after the pricing date)
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Maturity date:
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August 14, 2028
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Aggregate principal amount:
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$500,000
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Interest:
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None
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Underlying indices:
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The Dow Jones Industrial AverageSM (the “INDU Index”) and the S&P 500® Index (the “SPX Index”)
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Payment at maturity:
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●If the final index value of each underlying index is greater than or equal to its respective downside threshold value:
$1,000 + the greater of (i) $1,000 × the index percent change of the worst performing underlying index and (ii) the upside payment
●If the final index value of either underlying index is less than its respective downside threshold value, meaning that either underlying index has declined by more than the buffer amount of 20% from its respective initial index value to its respective final index value:
$1,000 + $[1,000 × (index percent change of the worst performing underlying index + 20%)]
Because the index percent change of the worst performing underlying index will be less than -20% in this scenario, the payment at maturity will be less, and potentially significantly less, than the stated principal amount of $1,000, subject to the minimum payment at maturity of $200 per security.
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Upside payment:
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$430 per security (43.00% of the stated principal amount)
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Index percent change:
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With respect to each underlying index, (final index value - initial index value) / initial index value
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Worst performing underlying index:
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The underlying index that has declined the most, meaning that it has the lesser index percent change
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Initial index value:
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With respect to the INDU Index, 32,774.41, which is the index closing value of such index on the pricing date
With respect to the SPX Index, 4,122.47, which is the index closing value of such index on the pricing date
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Downside threshold value:
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With respect to the INDU Index, 26,219.528, which is 80% of the initial index value for such index
With respect to the SPX Index, 3,297.976, which is 80% of the initial index value for such index
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Final index value:
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With respect to each underlying index, the index closing value of such index on the valuation date
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Valuation date:
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August 9, 2028, subject to postponement for non-index business days and certain market disruption events
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Buffer amount:
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20%
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Minimum payment at maturity:
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$200 per security
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CUSIP / ISIN:
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61774DZZ3 / US61774DZZ31
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Listing:
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The securities will not be listed on any securities exchange.
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Agent:
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Morgan Stanley & Co. LLC (“MS & Co.”), an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest.”
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Estimated value on the pricing date:
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$978.00 per security. See “Investment Summary” on page 2.
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Commissions and issue price:
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Price to public(1)
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Agent’s commissions and fees(2)
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Proceeds to us(3)
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Per security
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$1,000
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$10
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$990
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Total
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$500,000
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$5,000
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$495,000
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(1)The securities will be sold only to investors purchasing the securities in fee-based advisory accounts.
(2)MS & Co. expects to sell all of the securities that it purchases from us to an unaffiliated dealer at a price of $990 per security, for further sale to certain fee-based advisory accounts at the price to public of $1,000 per security. MS & Co. will not receive a sales commission with respect to the securities. See “Supplemental information regarding plan of distribution; conflicts of interest.” For additional information, see “Plan of Distribution (Conflicts of Interest)” in the accompanying product supplement for Jump Securities.
(3)See “Use of proceeds and hedging” on page 18.
The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 7.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this document or the accompanying product supplement, index supplement and prospectus is truthful or complete. 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.
You should read this document together with the related product supplement, index supplement and prospectus, each of which can be accessed via the hyperlinks below. Please also see “Additional Terms of the Securities” and “Additional Information About the Securities” at the end of this document.
References to “we,” “us” and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
Product Supplement for Jump Securities dated November 16, 2020 Index Supplement dated November 16, 2020 Prospectus dated November 16, 2020