August 2024
Preliminary Pricing Supplement No. 3,389
Registration Statement Nos. 333-275587; 333-275587-01
Dated August 6, 2024
Filed pursuant to Rule 424(b)(2)
Morgan
Stanley Finance LLC
Structured
Investments
Opportunities in
U.S. Equities
Market Linked
Securities—Leveraged Upside Participation and Contingent Downside
Principal at
Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal
Weight Index due August 21, 2029
Fully
and Unconditionally Guaranteed by Morgan Stanley
§ Linked
to the lowest performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index (each
referred to as an “underlying”)
§ The
securities offered are unsecured obligations of Morgan Stanley Finance LLC (“MSFL”) and are fully and unconditionally guaranteed
by Morgan Stanley. The securities will pay no interest, provide for a maturity payment amount that may be significantly less than the
face amount, and may be zero, and have the terms described in the accompanying product supplement for principal at risk securities, index
supplement and prospectus, as supplemented or modified by this document. At maturity:
§ If
the level of the lowest performing underlying has increased, investors will receive the face amount plus a positive return equal
to at least 135% (to be determined on the pricing date) of the percentage increase in the level of the lowest performing underlying from
its starting level
§ If
the level of the lowest performing underlying has decreased, but the lowest performing underlying has not decreased by more than 15%,
investors will receive the face amount
§ If
the lowest performing underlying has decreased by more than 15%, investors will have full downside exposure to the decrease in the level
of the lowest performing underlying from its starting level, and investors will lose more than 15%, and possibly all, of the face amount
§ Investors
may lose a significant portion, or all, of the face amount of the securities
§ These
long-dated securities are for investors who seek an equity index-based return and who are willing to risk their investment, risk exposure
to the lowest performing underlying and forgo current income in exchange for the participation rate and limited protection against loss
that applies only if the lowest performing underlying is greater than or equal to its respective threshold level
§ 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 securities
included in either of the underlyings
|
The current estimated value of the securities
is approximately $913.50 per security, or within $13.50 of that estimate. The estimated value of the securities is determined using our
own pricing and valuation models, market inputs and assumptions relating to the underlyings, instruments based on the underlyings, volatility
and other factors including current and expected interest rates, as well as an interest rate related to our secondary market credit spread,
which is the implied interest rate at which our conventional fixed rate debt trades in the secondary market. See “Estimated Value
of the Securities” on page 3.
The securities have complex features and investing
in the securities involves risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning
on page 11. All payments on the securities are subject to our credit risk.
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 for principal at risk securities, index supplement and prospectus, each of which can be accessed via the hyperlinks
below. When you read the accompanying product supplement and index supplement, please note that all references in such supplements to
the prospectus dated November 16, 2023, or to any sections therein, should refer instead to the accompanying prospectus dated April 12,
2024 or to the corresponding sections of such prospectus, as applicable. Please also see “Additional Information About the Securities”
at the end of this document.
As used in this document, “we,” “us”
and “our” refer to Morgan Stanley or MSFL, or Morgan Stanley and MSFL collectively, as the context requires.
Commissions
and offering price: |
Price
to public |
Agent’s
commissions(1)(2) |
Proceeds
to us(3) |
Per
security |
$1,000 |
$38.70 |
$961.30 |
Total |
$ |
$ |
$ |
| (1) | Wells Fargo Securities, LLC, an agent for this offering,
will receive a commission of up to $38.70 for each security it sells. Dealers, including Wells Fargo
Advisors (“WFA”), may receive a selling concession of up to $30.00 per security, and WFA will receive a distribution expense
fee of $1.20 for each security sold by WFA. See “Supplemental information concerning plan of distribution; conflicts of interest.” |
| (2) | In
respect of certain securities sold in this offering, we may pay a fee of up to $5.00 per security to selected securities dealers in consideration
for marketing and other services in connection with the distribution of the securities to other securities dealers. |
| (3) | See “Use of Proceeds and Hedging” in the accompanying
product supplement. |
Morgan Stanley |
Wells Fargo Securities |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Terms |
Issuer: |
Morgan Stanley Finance LLC |
Guarantor: |
Morgan Stanley |
Maturity
date: |
August 21, 2029†, subject to postponement if the calculation day is postponed* |
Underlyings: |
S&P MidCap 400® Index (the “MID Index”) and S&P 500® Equal Weight Index (the “SPW Index”) |
Maturity
payment amount: |
At maturity, the maturity payment amount per $1,000 face amount of
securities will be determined as follows:
· If
the ending level of the lowest performing underlying is greater than its starting level:
$1,000 + [$1,000 × underlying
return of lowest performing underlying × participation rate]
· If
the ending level of the lowest performing underlying is less than or equal to its starting level, but greater than or equal
to its threshold level:
$1,000
· If
the ending level of the lowest performing underlying is less than its threshold level:
$1,000 + [$1,000 × underlying return
of lowest performing underlying]
If the ending level of the lowest performing underlying is less
than its threshold level, you will lose more than 15%, and possibly all, of the face amount of your securities at maturity.
|
Participation
rate: |
At least 135%, to be determined on the pricing date |
Lowest
performing underlying: |
The underlying with the lowest underlying return |
Underlying
return: |
With respect to an underlying, the percentage change from its starting
level to its ending level, measured as follows:
ending level – starting level
starting level
|
Starting
level: |
With respect to the MID Index: , its closing
level on the pricing date.
With respect to the SPW Index: , its closing
level on the pricing date.
|
Ending
level: |
With respect to each underlying, its closing level on the calculation day. |
Calculation
day: |
August 16, 2029**† |
Threshold
level: |
With respect to the MID Index: ,
which is equal to 85% of its starting level.
With respect to the SPW Index: ,
which is equal to 85% of its starting level.
|
Face
amount: |
$1,000 per security. References in this document to a “security” are to a security with a face amount of $1,000. |
Pricing
date: |
August 16, 2024† |
Original
issue date: |
August 21, 2024† (3 business days after the pricing date) |
CUSIP
/ ISIN: |
61774FJP8 / US61774FJP80 |
Listing: |
The securities will not be listed on any securities exchange. |
Agents: |
Morgan Stanley & Co. LLC (“MS & Co.”), an affiliate of MSFL and a wholly owned subsidiary of Morgan Stanley, and Wells Fargo Securities, LLC (“WFS”). See “Additional Information About the Securities—Supplemental information regarding plan of distribution; conflicts of interest.” |
† To the extent we make
any change to the pricing date or original issue date, the calculation day and maturity date may also be changed in our discretion to
ensure that the term of the securities remains the same.
* Subject to postponement pursuant
to “General Terms of the Securities—Payment Dates” in the accompanying product supplement for principal at risk securities.
** Subject to postponement pursuant
to “General Terms of the Securities—Consequences of a Market Disruption Event; Postponement of a Calculation Day” in
the accompanying product supplement for principal at risk securities.
|
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Estimated Value of the Securities |
The face amount of each security is $1,000. This price includes costs
associated with issuing, selling, structuring and hedging the securities, which are borne by you, and, consequently, the estimated value
of the securities on the pricing date will be less than $1,000 per security. We estimate that the value of each security on the pricing
date will be approximately $913.50, or within $13.50 of that estimate. Our estimate of the value of the securities as determined on the
pricing date will be set forth in the final pricing supplement.
What goes into the estimated value on the pricing date?
In valuing the securities on the pricing date, we take into account
that the securities comprise both a debt component and a performance-based component linked to the underlyings. The estimated value of
the securities is determined using our own pricing and valuation models, market inputs and assumptions relating to the underlyings, instruments
based on the underlyings, volatility and other factors including current and expected interest rates, as well as an interest rate related
to our secondary market credit spread, which is the implied interest rate at which our conventional fixed rate debt trades in the secondary
market.
What determines the economic terms of the securities?
In determining the economic terms of the securities, including the
participation rate and the threshold levels, we use an internal funding rate which is likely to be lower than our secondary market credit
spreads and therefore advantageous to us. If the issuing, selling, structuring and hedging costs borne by you were lower or if the internal
funding rate were higher, one or more of the economic terms of the securities would be more favorable to you.
What is the relationship between the estimated value on the pricing
date and the secondary market price of the securities?
The price at which MS & Co. purchases the securities in the secondary
market, absent changes in market conditions, including those related to the underlyings, may vary from, and be lower than, the estimated
value on the pricing date, because the secondary market price takes into account our secondary market credit spread as well as the bid-offer
spread that MS & Co. would charge in a secondary market transaction of this type and other factors. However, because the costs associated
with issuing, selling, structuring and hedging the securities are not fully deducted upon issuance, for a period of up to 5 months following
the issue date, to the extent that MS & Co. may buy or sell the securities in the secondary market, absent changes in market conditions,
including those related to the underlyings, and to our secondary market credit spreads, it would do so based on values higher than the
estimated value. We expect that those higher values will also be reflected in your brokerage account statements.
MS & Co. may, but is not obligated to, make a market in the securities
and, if it once chooses to make a market, may cease doing so at any time.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
The Principal at Risk Securities Linked to the Lowest Performing of
the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029 (the “securities”)
may be appropriate for investors who:
| § | Seek an alternative to direct exposure to the underlyings that enhances returns
for any positive performance of the lowest performing underlying |
| § | Seek to enhance returns and potentially outperform the lowest performing
underlying by taking advantage of the participation rate, with no limitation on the appreciation potential |
| § | Understand that the ending level of the lowest performing underlying may
decrease by more than 15% from its starting level, resulting in a loss of a significant portion or all of the initial investment |
| § | Understand that the return on the securities will depend solely on the performance
of the lowest performing underlying and that they will not benefit in any way from the performance of any better performing underlying |
| § | Understand that the securities are riskier than alternative investments linked
to only one of the underlyings or linked to a basket composed of each underlying |
| § | Understand and are willing to accept the full downside risks of each underlying |
| § | Are willing to forgo interest payments on the securities and dividends on
securities included in the underlyings |
| § | Are willing to hold the securities to maturity |
The securities are not designed for, and may not be an appropriate
investment for, investors who:
| § | Seek a liquid investment or are unable or unwilling to hold the securities
to maturity |
| § | Are unwilling to accept the risk that the ending level of the lowest performing
underlying may decrease by more than 15% from its starting level, resulting in a loss of a significant portion or all of the initial investment |
| § | Seek full return of the face amount of the securities at maturity |
| § | Seek current income from their investments |
| § | Are unwilling to accept the risk of exposure to each of the underlyings |
| § | Seek exposure to the lowest performing underlying but are unwilling to accept
the risk/return trade-offs inherent in the maturity payment amount for the securities |
| § | Seek exposure to a basket composed of each underlying or a similar investment
in which the overall return is based on a blend of the performances of the underlyings, rather than solely on the lowest performing underlying |
| § | Are unwilling to accept our credit risk |
| § | Prefer the lower risk of fixed income investments with comparable maturities
issued by companies with comparable credit ratings |
The considerations identified above are not
exhaustive. Whether or not the securities are an appropriate investment for you will depend on your individual circumstances, and you
should reach an investment decision only after you and your investment, legal, tax, accounting and other advisors have carefully considered
the appropriateness of an investment in the securities in light of your particular circumstances. You should also review carefully the
“Risk Factors” herein and in the accompanying product supplement for risks related to an investment in the securities. For
more information about the underlyings, please see the sections titled “S&P MidCap 400® Index Overview”
and “S&P 500® Equal Weight Index Overview” below.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Determining Maturity Payment Amount |
At maturity, the maturity payment amount per $1,000 face amount of
securities will be determined as follows:
![](https://www.sec.gov/Archives/edgar/data/1666268/000095010324011738/image_010.jpg)
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Payoff Diagram
The payoff diagram below illustrates the maturity payment amount on
the securities based on a range of hypothetical underlying returns of the lowest performing underlying and the following terms:
Face amount: |
$1,000 per security |
Hypothetical participation rate: |
135%. The actual participation rate will be determined on the pricing date. |
Threshold level: |
85% of its starting level |
Securities
Payoff Diagram |
![](https://www.sec.gov/Archives/edgar/data/1666268/000095010324011738/image_010.gif) |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Scenario Analysis and Examples of Maturity Payment Amount at Maturity |
The following scenario analysis
and examples are provided for illustrative purposes only and are hypothetical. They do not purport to be representative of every possible
scenario concerning increases or decreases in the levels of the underlyings relative to their respective starting levels. We cannot predict
the ending levels of the underlyings on the calculation day. You should not take the scenario analysis and these examples as an indication
or assurance of the expected performance of the underlyings. The numbers appearing in the examples below may have been rounded for ease
of analysis. Notwithstanding anything to the contrary in the accompanying product supplement for principal at risk securities, the amount
you will receive per $1,000 face amount of securities at maturity will be the maturity payment amount,
defined and calculated as provided in this document. The following scenario analysis and examples illustrate the maturity payment amount
on a hypothetical offering of the securities, based on the following terms*:
Investment term: |
5 years |
Hypothetical starting level: |
With respect to the MID Index: 100 |
|
With respect to the SPW Index: 100 |
Hypothetical threshold level: |
With respect to the MID Index, 85, which is 85% of its respective hypothetical starting level |
|
With respect to the SPW Index, 85, which is 85% of its respective hypothetical starting level |
Hypothetical participation rate: |
135%. The actual participation rate will be determined on the pricing date. |
* The hypothetical starting
level of 100 for each underlying has been chosen for illustrative purposes only and does not represent the actual starting level of either
underlying. The actual starting levels, threshold levels and participation rate will be determined on the pricing date and will be set
forth under “Terms” above. For historical data regarding the actual closing levels of the underlyings, see the historical
information set forth herein.
Example 1 — Both
underlyings appreciate over the term of the securities, and investors receive a positive return, calculated based on the underlying return
of the lowest performing underlying.
Ending level |
|
MID Index: 110 |
|
|
SPW Index: 150 |
Underlying return |
|
MID Index: (110 – 100) / 100 = 10%
SPW Index: (150 – 100) / 100 = 50%
|
Maturity payment amount |
= |
$1,000 + [$1,000 × underlying return of lowest performing underlying × participation rate] |
|
= |
$1,000 + [$1,000 × 10% × 135%] |
|
= |
$1,135 |
In example 1, the ending levels of both the MID Index and the SPW Index
are greater than their starting levels. The MID Index has appreciated by 10%, while the SPW Index has appreciated by 50%. Therefore, investors
receive at maturity the face amount plus a positive return equal to 135% of the appreciation of the lowest performing underlying,
which is the MID Index in this example. Investors receive $1,135 per security at maturity (assuming a hypothetical participation rate
of 135%). The actual participation rate will be determined on the pricing date.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Example 2 — One
underlying appreciates, while the other declines over the term of the securities but neither underlying declines below its respective
threshold level, and investors receive the face amount.
Ending level |
|
MID Index: 130 |
|
|
SPW Index: 90 |
Underlying return |
|
MID Index: (130 – 100) / 100 = 30%
SPW Index: (90 – 100) / 100 = -10%
|
Maturity payment amount |
= |
$1,000 |
In example 2, the ending level of the MID Index is greater than its
starting level, while the ending level of the SPW Index is less than its starting level, but is greater than or equal to its respective
threshold level. The MID Index has appreciated by 30% while the SPW Index has declined by 10%. Investors will receive the face amount
of $1,000.
Example 3 — One
underlying appreciates while the other declines over the term of the securities, and the ending level of the lowest performing underlying
is less than its respective threshold level. Investors are therefore exposed to the decline in the lowest performing underlying from its
starting level.
Ending level |
|
MID Index: 130 |
|
|
SPW Index: 30 |
Underlying return |
|
MID Index: (130 – 100) / 100 = 30%
SPW Index: (30 – 100) / 100 = -70%
|
Maturity payment amount |
= |
$1,000 + [$1,000 × underlying return of lowest performing underlying] |
|
= |
$1,000 + [$1,000 ×-70%] |
|
= |
$300 |
In example 3, the ending level of the MID Index is greater than its
starting level, while the ending level of the SPW Index has declined below its threshold level. The MID Index has appreciated by 30% while
the SPW Index has depreciated by 70%. Because the ending level of the SPW Index has declined below its threshold level, investors are
exposed to the negative performance of the SPW Index, which is the lowest performing underlying in this example. Investors receive a maturity
payment amount of $300.
Example 4 — Both
underlyings decline below their respective threshold levels, and investors are therefore exposed to the decline in the lowest performing
underlying from its starting level.
Ending level |
|
MID Index: 30 |
|
|
SPW Index: 40 |
Underlying return |
|
MID Index: (30 – 100) / 100 = -70%
SPW Index: (40 – 100) / 100 = -60%
|
Maturity payment amount |
= |
$1,000 + [$1,000 × underlying return of lowest performing underlying] |
|
= |
$1,000 + [$1,000 ×-70%] |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
In example 4, the ending levels of both the MID Index and the SPW Index
are less than their respective threshold levels. The MID Index has declined by 70% while the SPW Index has declined by 60%. Therefore,
investors are exposed to the negative performance of the MID Index, which is the lowest performing underlying in this example. Investors
receive a maturity payment amount of $300.
Because the maturity payment amount of the securities is based on
the lowest performing underlying, a decline in either underlying below its respective threshold level will result in a significant loss
of your investment, even if the other underlying has appreciated or has not declined as much.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Scenario Analysis – Hypothetical Maturity
Payment Amount for each $1,000 Face Amount of Securities.
Performance
of the Lowest Performing Underlying* |
Performance of the Securities(1)
|
Ending Level
|
Underlying Return
|
Maturity Payment
Amount
|
Return on Securities(2)
|
200 |
100.00% |
$2,350.00 |
135.00% |
190 |
90.00% |
$2,215.00 |
121.50% |
180 |
80.00% |
$2,080.00 |
108.00% |
170 |
70.00% |
$1,945.00 |
94.50% |
160 |
60.00% |
$1,810.00 |
81.00% |
150 |
50.00% |
$1,675.00 |
67.50% |
140 |
40.00% |
$1,540.00 |
54.00% |
130 |
30.00% |
$1,405.00 |
40.50% |
120 |
20.00% |
$1,270.00 |
27.00% |
110 |
10.00% |
$1,135.00 |
13.50% |
105 |
5.00% |
$1,067.50 |
6.75% |
100(3) |
0.00% |
$1,000.00 |
0.00% |
95 |
-5.00% |
$1,000.00 |
0.00% |
90 |
-10.00% |
$1,000.00 |
0.00% |
85 |
-15.00% |
$1,000.00 |
0.00% |
84 |
-16.00% |
$840.00 |
-16.00% |
80 |
-20.00% |
$800.00 |
-20.00% |
70 |
-30.00% |
$700.00 |
-30.00% |
60 |
-40.00% |
$600.00 |
-40.00% |
50 |
-50.00% |
$500.00 |
-50.00% |
40 |
-60.00% |
$400.00 |
-60.00% |
30 |
-70.00% |
$300.00 |
-70.00% |
20 |
-80.00% |
$200.00 |
-80.00% |
10 |
-90.00% |
$100.00 |
-90.00% |
0 |
-100.00% |
$0.00 |
-100.00% |
|
|
|
|
*The underlyings exclude cash
dividend payments on stocks included in the underlyings.
(1) Assumes a participation rate of 135%. The
actual participation rate will be determined on the pricing date.
(2) The “Return
on Securities” is the number, expressed as a percentage, which results from comparing the maturity payment amount per $1,000 face
amount of securities to the purchase price of $1,000 per security.
(3) The hypothetical starting level of each
underlying.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
This section describes the material risks relating to the securities.
For further discussion of these and other risks, you should read the section entitled “Risk Factors” in the accompanying product
supplement for principal at risk securities, index supplement and prospectus. We also urge you to consult your investment, legal, tax,
accounting and other advisers in connection with your investment in the securities.
Risks Relating to an Investment in the Securities
| § | The securities do not pay interest, and you will lose more than 15%, and
possibly all, of the face amount of your securities at maturity if the ending level of the lowest performing underlying is less than its
respective threshold level. The terms of the securities differ from those of ordinary debt securities in that the securities do not
pay interest or repay a fixed amount of the face amount of the securities. If the ending level of the lowest performing underlying is
less than its threshold level, which is 85% of the starting level, you will lose more than 15%, and possibly all, of the face amount of
your securities at maturity. Investors may lose their entire investment in the securities. |
| § | The market price will be influenced by many unpredictable factors.
Several factors, many of which are beyond our control, will influence the value of the securities in the secondary market and the price
at which MS & Co. or any other dealer may be willing to purchase or sell the securities in the secondary market, including the level,
volatility (frequency and magnitude of changes in level) and dividend yield of the underlyings, interest and yield rates in the market,
time remaining to maturity, geopolitical conditions and economic, financial, political, regulatory or judicial events that affect the
underlyings or equities markets generally and which may affect the ending levels of the underlyings and any actual or anticipated changes
in our credit ratings or credit spreads. Generally, the longer the time remaining to maturity, the more the market price of the securities
will be affected by the other factors described above. The levels of the underlyings may be, and have recently been, volatile, and we
can give you no assurance that the volatility will lessen. See “S&P MidCap 400® Index Overview” and “S&P
500® Equal Weight Index Overview” below. You may receive less, and possibly significantly less, than the face amount
per security if you try to sell your securities prior to maturity. |
| § | The securities are subject to our credit risk, and any actual or anticipated
changes to our credit ratings or credit spreads may adversely affect the market value of the securities. You are dependent on our
ability to pay all amounts due on the securities at maturity, and therefore you are subject to our credit risk. If we default on our obligations
under the securities, your investment would be at risk and you could lose some or all of your investment. As a result, the market value
of the securities prior to maturity will be affected by changes in the market’s view of our creditworthiness. Any actual or anticipated
decline in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to adversely
affect the market value of the securities. |
| § | As a finance subsidiary, MSFL has no independent operations and will have
no independent assets. As a finance subsidiary, MSFL has no independent operations beyond the issuance and administration of its
securities and will have no independent assets available for distributions to holders of MSFL securities if they make claims in respect
of such securities in a bankruptcy, resolution or similar proceeding. Accordingly, any recoveries by such holders will be limited to those
available under the related guarantee by Morgan Stanley and that guarantee will rank pari passu with all other unsecured, unsubordinated
obligations of Morgan Stanley. Holders will have recourse only to a single claim against Morgan Stanley and its assets under the guarantee.
Holders of securities issued by MSFL should accordingly assume that in any such proceedings they would not have any priority over and
should be treated pari passu with the claims of other unsecured, unsubordinated creditors of Morgan Stanley, including holders
of Morgan Stanley-issued securities. |
| § | The amount payable on the securities is not linked to the values of the
underlyings at any time other than the calculation day. The ending level of each underlying will be based on the closing level of
such underlying on the calculation day, subject to postponement for non-trading days and certain market disruption events. Even if both
underlyings appreciate prior to the calculation day but the level of either underlying decreases by the calculation day, |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
the maturity payment amount will be
less, and may be significantly less, than it would have been had the maturity payment amount been linked to the levels of the underlyings
prior to such decrease. Although the actual levels of the underlyings on the maturity date or at other times during the term of the securities
may be higher than their respective ending levels, the maturity payment amount will be based solely on the closing levels of the underlyings
on the calculation day.
| § | Investing in the securities is not equivalent to investing in either underlying.
Investing in the securities is not equivalent to investing in either underlying or the component stocks of either underlying. Investors
in the securities will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to
the stocks that constitute either underlying. |
| § | The rate we are willing to pay for securities of this type, maturity and
issuance size is likely to be lower than the rate implied by our secondary market credit spreads and advantageous to us. Both the lower
rate and the inclusion of costs associated with issuing, selling, structuring and hedging the securities in the face amount reduce the
economic terms of the securities, cause the estimated value of the securities to be less than the face amount and will adversely affect
secondary market prices. Assuming no change in market conditions or any other relevant factors, the prices, if any, at which dealers,
including MS & Co., may be willing to purchase the securities in secondary market transactions will likely be significantly lower
than the face amount, because secondary market prices will exclude the issuing, selling, structuring and hedging-related costs that are
included in the face amount and borne by you and because the secondary market prices will reflect our secondary market credit spreads
and the bid-offer spread that any dealer would charge in a secondary market transaction of this type as well as other factors. |
The inclusion of the costs of issuing,
selling, structuring and hedging the securities in the face amount and the lower rate we are willing to pay as issuer make the economic
terms of the securities less favorable to you than they otherwise would be.
However, because the costs associated
with issuing, selling, structuring and hedging the securities are not fully deducted upon issuance, for a period of up to 5 months following
the issue date, to the extent that MS & Co. may buy or sell the securities in the secondary market, absent changes in market conditions,
including those related to the underlyings, and to our secondary market credit spreads, it would do so based on values higher than the
estimated value, and we expect that those higher values will also be reflected in your brokerage account statements.
| § | The estimated value of the securities is determined by reference to our
pricing and valuation models, which may differ from those of other dealers and is not a maximum or minimum secondary market price.
These pricing and valuation models are proprietary and rely in part on subjective views of certain market inputs and certain assumptions
about future events, which may prove to be incorrect. As a result, because there is no market-standard way to value these types of securities,
our models may yield a higher estimated value of the securities than those generated by others, including other dealers in the market,
if they attempted to value the securities. In addition, the estimated value on the pricing date does not represent a minimum or maximum
price at which dealers, including MS & Co., would be willing to purchase your securities in the secondary market (if any exists) at
any time. The value of your securities at any time after the date of this document will vary based on many factors that cannot be predicted
with accuracy, including our creditworthiness and changes in market conditions. See also “The market price will be influenced by
many unpredictable factors” above. |
| § | The securities will not be listed on any securities exchange and secondary
trading may be limited. The securities will not be listed on any securities exchange. Therefore, there may be little or no secondary
market for the securities. MS & Co. and WFS may, but are not obligated to, make a market in the securities and, if either of them
once chooses to make a market, may cease doing so at any time. When they do make a market, they will generally do so for transactions
of routine secondary market size at prices based on their respective estimates of the current value of the securities, taking into account
their respective bid/offer spreads, our credit spreads, market volatility, the notional size of the proposed sale, the cost of unwinding
any related hedging positions, the time remaining to maturity and the likelihood that they will be able to resell the securities. Even
if there is a secondary market, it may not provide enough |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
liquidity to allow you to trade or
sell the securities easily. Since other broker-dealers may not participate significantly in the secondary market for the securities, the
price at which you may be able to trade your securities is likely to depend on the price, if any, at which MS & Co. or WFS is willing
to transact. If, at any time, MS & Co. and WFS were to cease making a market in the securities, it is likely that there would be no
secondary market for the securities. Accordingly, you should be willing to hold your securities to maturity.
| § | The calculation agent, which is a subsidiary of Morgan Stanley and an
affiliate of MSFL, will make determinations with respect to the securities. As calculation agent, MS & Co. will determine the
starting levels, the threshold levels and the ending levels and will calculate the amount of cash you receive at maturity, if any. Moreover,
certain determinations made by MS & Co., in its capacity as calculation agent, may require it to exercise discretion and make subjective
judgments, such as with respect to the occurrence or non-occurrence of market disruption events and the selection of a successor index
or calculation of an ending level in the event of a market disruption event or discontinuance of an underlying. These potentially subjective
determinations may adversely affect the payout to you at maturity, if any. For further information regarding these types of determinations,
see “General Terms of the Securities—Market Disruption Events,” “—Adjustments to an Index,” “—Discontinuance
of an Index,” “—Consequences of a Market Disruption Event; Postponement of a Calculation Day” and “Alternate
Exchange Calculation in Case of an Event of Default” in the accompanying product supplement for principal at risk securities. In
addition, MS & Co. has determined the estimated value of the securities on the pricing date. |
| § | Hedging and trading activity by our affiliates could potentially adversely
affect the value of the securities. One or more of our affiliates and/or third-party dealers expect to carry out hedging activities
related to the securities (and possibly to other instruments linked to the underlyings or the component stocks of the underlyings), including
trading in the stocks that constitute the underlyings as well as in other instruments related to the underlyings. As a result, these entities
may be unwinding or adjusting hedge positions during the term of the securities, and the hedging strategy may involve greater and more
frequent dynamic adjustments to the hedge as the calculation day approaches. Some of our affiliates also trade the stocks that constitute
the underlyings and other financial instruments related to the underlyings on a regular basis as part of their general broker-dealer and
other businesses. Any of these hedging or trading activities on or prior to the pricing date could potentially affect the starting level
of an underlying, and, therefore, could increase the level at or above which such underlying must close on the calculation day so that
investors do not suffer a significant loss on their initial investment in the securities (depending also on the performance of the other
underlying). Additionally, such hedging or trading activities during the term of the securities, including on the calculation day, could
adversely affect the level of an underlying on the calculation day, and, accordingly, the amount of cash an investor will receive at maturity,
if any (depending also on the performance of the other underlying). |
| § | The maturity date may be postponed if the calculation day is postponed.
If the scheduled calculation day is not a trading day or if a market disruption event occurs on that day so that the calculation day is
postponed and falls less than three business days prior to the maturity date, the maturity date of the securities will be postponed to
the third business day following that calculation day as postponed. |
| § | Potentially inconsistent research, opinions or recommendations by Morgan
Stanley, MSFL, WFS or our or their respective affiliates. Morgan Stanley, MSFL, WFS and our or their respective affiliates may publish
research from time to time on financial markets and other matters that may influence the value of the securities, or express opinions
or provide recommendations that are inconsistent with purchasing or holding the securities. Any research, opinions or recommendations
expressed by Morgan Stanley, MSFL, WFS or our or their respective affiliates may not be consistent with each other and may be modified
from time to time without notice. Investors should make their own independent investigation of the merits of investing in the securities
and the underlyings to which the securities are linked. |
| § | The U.S. federal income tax consequences of an investment in the securities
are uncertain. Please read the discussion under “Additional Information About the Securities—Tax considerations”
in this document and the discussion under “United States Federal Taxation” in the accompanying product supplement for principal
at risk securities (together, the “Tax Disclosure Sections”) concerning the U.S. federal income tax consequences of an investment
in the securities. There is no direct legal authority regarding the proper U.S. federal tax treatment of the |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
securities, and we do not plan to
request a ruling from the Internal Revenue Service (the “IRS”). Consequently, significant aspects of the tax treatment of
the securities are uncertain, and the IRS or a court might not agree with the tax treatment of a security as a single financial contract
that is an “open transaction” for U.S. federal income tax purposes. If the IRS were successful in asserting an alternative
treatment of the securities, the tax consequences of the ownership and disposition of the securities, including the timing and character
of income recognized by U.S. Holders and the withholding tax consequences to Non-U.S. Holders, might be materially and adversely affected.
Moreover, future legislation, Treasury regulations or IRS guidance could adversely affect the U.S. federal tax treatment of the securities,
possibly retroactively.
Both U.S. and Non-U.S. Holders should
consult their tax advisers regarding the U.S. federal income tax consequences of an investment in the securities, including possible alternative
treatments, as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
Risks Relating to the Underlyings
| § | You are exposed to the price risk of both underlyings. Your return
on the securities is not linked to a basket consisting of both underlyings. Rather, it will be based upon the independent performance
of each underlying. Unlike an instrument with a return linked to a basket of underlying assets, in which risk is mitigated and diversified
among all the components of the basket, you will be exposed to the risks related to both underlyings. Poor performance by either underlying
over the term of the securities will negatively affect your return and will not be offset or mitigated by any positive performance by
the other underlying. If either underlying declines to below its respective threshold level as of the calculation day, you will be exposed
to the negative performance of the lowest performing underlying at maturity, even if the other underlying has appreciated or has not declined
as much, and you will lose a significant portion or all of your investment. Accordingly, your investment is subject to the price risk
of both underlyings. |
| § | Because the securities are linked to the performance of the lowest performing
underlying, you are exposed to greater risk of sustaining a significant loss on your investment than if the securities were linked to
just one underlying. The risk that you will suffer a significant loss on your investment is greater if you invest in the securities
as opposed to substantially similar securities that are linked to just the performance of one underlying. With two underlyings, it is
more likely that either underlying will decline to below its threshold level as of the calculation day, than if the securities were linked
to only one underlying. Therefore it is more likely that you will suffer a significant loss on your investment. |
| § | Adjustments to the underlyings could adversely affect the value of the
securities. The publisher of either underlying may add, delete or substitute the stocks constituting such underlying or make other
methodological changes that could change the value of such underlying. The publisher of either underlying may discontinue or suspend calculation
or publication of such underlying at any time. In these circumstances, the calculation agent will have the sole discretion to substitute
a successor underlying that is comparable to the discontinued underlying and is permitted to consider indices that are calculated and
published by the calculation agent or any of its affiliates. If the calculation agent determines
that there is no appropriate successor underlying, the maturity payment amount on the securities will be an amount based on the closing
prices at maturity of the securities composing such underlying at the time of such discontinuance, without rebalancing or substitution,
computed by the calculation agent in accordance with the formula for calculating such underlying last in effect prior to discontinuance
of the underlying. |
| § | Historical levels of the underlyings should not be taken as an indication
of the future performance of the underlyings during the term of the securities. No assurance can be given as to the level of the underlyings
at any time, including on the calculation day, because historical levels of the underlyings do not provide an indication of future performance
of the underlyings. |
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
S&P MidCap 400® Index Overview |
The S&P MidCap 400® Index, which is calculated,
maintained and published by S&P® Dow Jones Indices LLC (“S&P®”), is intended to provide
a benchmark for performance measurement of the medium capitalization segment of the U.S. equity markets by tracking the stock price movement
of 400 companies with mid-sized market capitalizations. Component stocks of the S&P MidCap 400® Index are required
to have a total company level market capitalization that reflects approximately the 85th – 93rd percentile
of the S&P® Total Market Index. The S&P MidCap 400® Index measures the relative performance of the
400 constituent stocks as of a particular time as compared to the common stocks of 400 similar companies on the base date of June 28,
1991. The S&P MidCap 400® Index does not overlap holdings with the S&P 500® Index or the S&P
SmallCap 600® Index. For additional information about the S&P MidCap 400® Index, see the information
set forth under “S&P® U.S. Indices—S&P MidCap 400® Index” in the accompanying
index supplement.
The following graph sets forth the daily closing levels of the MID
Index for the period from January 1, 2019 through August 2, 2024. The closing level of the MID Index on August 2, 2024 was 2,948.01. We
obtained the information in the graph below from Bloomberg Financial Markets without independent verification. The MID Index has at times
experienced periods of high volatility. You should not take the historical levels of the MID Index as an indication of its future performance,
and no assurance can be given as to the closing level of the MID Index on the calculation day.
S&P MidCap 400®
Index
Daily Closing Levels
January 1, 2019 to August 2,
2024
|
![](https://www.sec.gov/Archives/edgar/data/1666268/000095010324011738/image_001.jpg) |
“Standard & Poor’s®,”
“S&P®,” “S&P 400®,” “Standard & Poor’s MidCap 400®
Index” and “S&P MidCap Index” are trademarks of Standard and Poor’s Financial Services LLC. For more information,
see “S&P® U.S. Indices” in the accompanying index supplement.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
S&P 500® Equal Weight Index Overview |
The S&P 500® Equal Weight Index is the equal-weight
version of the S&P 500® Index. The S&P 500® Equal Weight Index includes the same constituents
as the capitalization-weighted S&P 500® Index, but each company in the S&P 500® Equal
Weight Index is allocated a fixed weight of 0.2% of the index total at each quarterly rebalancing. Therefore, the performance of the S&P
500® Equal Weight Index will differ, perhaps materially, from the performance of the S&P 500® Index,
which is weighted unevenly based on market capitalization.
The S&P 500® Index, which is calculated, maintained
and published by S&P® Dow Jones Indices LLC (“S&P®”), is intended to provide a
benchmark for performance measurement of the large capitalization segment of the U.S. equity markets by tracking the stock price movement
of 500 companies with large market capitalizations. Component stocks of the S&P 500® Index are required to have
a total company level market capitalization that reflects approximately the 85th percentile of the S&P® Total
Market Index. The S&P 500® Index measures the relative performance of the common stocks of 500 companies as of
a particular time as compared to the performance of the common stocks of 500 similar companies during the base period of the years 1941
through 1943. For additional information about the S&P 500® Index, see the information set forth under “S&P® U.S.
Indices” in the accompanying index supplement.
The following graph sets forth the daily closing levels of the SPW
Index for the period from January 1, 2019 through August 2, 2024. The closing level of the SPW Index on August 2, 2024 was 6,760.10. We
obtained the information in the graph below from Bloomberg Financial Markets without independent verification. The SPW Index has at times
experienced periods of high volatility. You should not take the historical levels of the SPW Index as an indication of its future performance,
and no assurance can be given as to the closing level of the SPW Index on the calculation day.
S&P 500®
Equal Weight Index
Daily Closing Levels
January 1, 2019 to August 2,
2024
|
![](https://www.sec.gov/Archives/edgar/data/1666268/000095010324011738/image_012.gif) |
“Standard & Poor’s®,” “S&P®,”
“S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of Standard
and Poor’s Financial Services LLC. For more information, see “S&P® U.S. Indices” in the accompanying
index supplement.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Additional Information About the Securities |
Minimum ticketing size
$1,000 / 1 security
Tax considerations
Although there is uncertainty regarding the U.S.
federal income tax consequences of an investment in the securities due to the lack of governing authority, in the opinion of our counsel,
Davis Polk & Wardwell LLP, under current law, and based on current market conditions, it is reasonable to treat a security as a single
financial contract that is an “open transaction” for U.S. federal income tax purposes. However, because our counsel’s
opinion is based in part on market conditions as of the date of this document, it is subject to confirmation on the pricing date.
Assuming this treatment of the securities is respected and subject
to the discussion in “United States Federal Taxation” in the accompanying product supplement for principal at risk securities,
the following U.S. federal income tax consequences should result based on current law:
| § | A U.S. Holder should not be required to recognize taxable income
over the term of the securities prior to settlement, other than pursuant to a sale or exchange. |
| § | Upon sale, exchange or settlement of the securities, a U.S.
Holder should recognize gain or loss equal to the difference between the amount realized and the U.S. Holder’s tax basis in the
securities. Such gain or loss should be long-term capital gain or loss if the investor has held the securities for more than one year,
and short-term capital gain or loss otherwise. |
We do not plan to request a ruling from the Internal
Revenue Service (the “IRS”) regarding the treatment of the securities. An alternative characterization of the securities could
materially and adversely affect the tax consequences of ownership and disposition of the securities, including the timing and character
of income recognized. In addition, the U.S. Treasury Department and the IRS have requested comments on various issues regarding the U.S.
federal income tax treatment of “prepaid forward contracts” and similar financial instruments and have indicated that such
transactions may be the subject of future regulations or other guidance. Furthermore, members of Congress have proposed legislative changes
to the tax treatment of derivative contracts. Any legislation, Treasury regulations or other guidance promulgated after consideration
of these issues could materially and adversely affect the tax consequences of an investment in the securities, possibly with retroactive
effect.
As discussed in the accompanying product supplement
for principal at risk securities, Section 871(m) of the Internal Revenue Code of 1986, as amended, and Treasury regulations promulgated
thereunder (“Section 871(m)”) generally impose a 30% (or a lower applicable treaty rate) withholding tax on dividend equivalents
paid or deemed paid to Non-U.S. Holders with respect to certain financial instruments linked to U.S. equities or indices that include
U.S. equities (each, an “Underlying Security”). Subject to certain exceptions, Section 871(m) generally applies to securities
that substantially replicate the economic performance of one or more Underlying Securities, as determined based on tests set forth in
the applicable Treasury regulations (a “Specified Security”). However, pursuant to an IRS notice, Section 871(m) will not
apply to securities issued before January 1, 2027 that do not have a delta of one with respect to any Underlying Security. Based on the
terms of the securities and current market conditions, we expect that the securities will not have a delta of one with respect to any
Underlying Security on the pricing date. However, we will provide an updated determination in the final pricing supplement. Assuming that
the securities do not have a delta of one with respect to any Underlying Security, our counsel is of the opinion that the securities should
not be Specified Securities and, therefore, should not be subject to Section 871(m).
Our determination is not binding on the IRS, and
the IRS may disagree with this determination. Section 871(m) is complex and its application may depend on your particular circumstances,
including whether you enter into other transactions with respect to an Underlying Security. If withholding is required, we will not be
required to pay any additional amounts with respect to the amounts so withheld. You should consult your tax adviser regarding the potential
application of Section 871(m) to the securities.
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
Both U.S. and non-U.S. investors considering
an investment in the securities should read the discussion under “Risk Factors” in this document and the discussion under
“United States Federal Taxation” in the accompanying product supplement for principal at risk securities and consult their
tax advisers regarding all aspects of the U.S. federal income tax consequences of an investment in the securities, including possible
alternative treatments, and any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.
The discussion in the preceding paragraphs under
“Tax considerations” and the discussion contained in the section entitled “United States Federal Taxation” in
the accompanying product supplement for principal at risk securities, insofar as they purport to describe provisions of U.S. federal income
tax laws or legal conclusions with respect thereto, constitute the full opinion of Davis Polk & Wardwell LLP regarding the material
U.S. federal tax consequences of an investment in the securities.
Additional considerations
Client accounts over which Morgan Stanley, Morgan
Stanley Wealth Management or any of their respective subsidiaries have investment discretion are not permitted to purchase the securities,
either directly or indirectly.
Supplemental information regarding plan of distribution;
conflicts of interest
MS & Co. and WFS will act as the agents for
this offering. WFS will receive a commission of up to $38.70 for each security it sells. WFS proposes to offer the securities in part
directly to the public at the price to public set forth on the cover page of this document and in part to Wells Fargo Advisors (“WFA”)
(the trade name of the retail brokerage business of WFS’s affiliates, Wells Fargo Clearing Services, LLC and Wells Fargo Advisors
Financial Network, LLC), an affiliate of WFS, or other securities dealers at such price less a selling concession of up to $30.00 per
security. In addition to the selling concession allowed to WFA, WFS will pay $1.20 per security of the commission to WFA as a distribution
expense fee for each security sold by WFA.
In addition, in respect of certain securities sold
in this offering, we may pay a fee of up to $5.00 per security to selected securities dealers in consideration for marketing and other
services in connection with the distribution of the securities to other securities dealers.
See "Plan of Distribution, Conflicts of Interest"
in the accompanying product supplement for principal at risk securities for information about the distribution arrangements for the securities.
References therein to "agent" refer to each of MS & Co. and WFS, as agents for this offering, except that references to
"agent" in the context of offers to certain Morgan Stanley dealers and compliance with FINRA Rule 5121 do not apply to WFS.
MS & Co., WFS or their affiliates may enter into hedging transactions with us in connection with this offering.
MS & Co. is an affiliate of MSFL and a wholly
owned subsidiary of Morgan Stanley, and it and other affiliates of ours expect to make a profit by selling, structuring and, when applicable,
hedging the securities. When MS & Co. prices this offering of securities, it will determine the economic terms of the securities,
including the participation rate, such that for each security the estimated value on the pricing date will be no lower than the minimum
level described in “Estimated Value of the Securities” beginning on page 3.
MS & Co. will conduct this offering in compliance with the requirements
of FINRA Rule 5121 of the Financial Industry Regulatory Authority, Inc., which is commonly referred to as FINRA, regarding a FINRA member
firm’s distribution of the securities of an affiliate and related conflicts of interest. MS & Co. or any of our other affiliates
may not make sales in this offering to any discretionary account. See “Plan of Distribution (Conflicts of Interest)” and “Use
of Proceeds and Hedging” in the accompanying product supplement for principal at risk securities.
Where you can find more information
Morgan Stanley and MSFL have filed a registration
statement (including a prospectus, as supplemented by the product supplement for principal at risk securities and the index supplement)
with the Securities and Exchange Commission, or SEC, for the offering to which this communication relates. You should read the prospectus
in that registration statement, the product supplement for principal at risk securities, the index supplement and any other documents
relating to this offering that Morgan Stanley and MSFL have filed with the SEC for more complete information about Morgan Stanley, MSFL
and
Morgan Stanley Finance LLC
Market Linked Securities—Leveraged Upside Participation and Contingent Downside
Principal at Risk Securities Linked to the Lowest Performing of the S&P MidCap 400® Index and the S&P 500® Equal Weight Index due August 21, 2029
this offering. When you read the accompanying product
supplement and index supplement, please note that all references in such supplements to the prospectus dated November 16, 2023, or to
any sections therein, should refer instead to the accompanying prospectus dated April 12, 2024 or to the corresponding sections of such
prospectus, as applicable. You may get these documents without cost by visiting EDGAR on the SEC web site at.www.sec.gov.
Alternatively, Morgan Stanley, MSFL, any underwriter or any dealer participating in the offering will arrange to send you the product
supplement for principal at risk securities, index supplement and prospectus if you so request by calling toll-free 1-(800)-584-6837.
You may access these documents on the SEC web site
at.www.sec.gov as follows:
Product
Supplement for Principal at Risk Securities dated November 16, 2023
Index
Supplement dated November 16, 2023
Prospectus
dated April 12, 2024
Terms used but not defined in this document are
defined in the product supplement for principal at risk securities, in the index supplement or in the prospectus.
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