Morgan Stanley's New Investment Product Offers 145% Upside Potential with Downside Buffer

Rhea-AI Filing Summary

Morgan Stanley Finance has announced Worst-of SPX and INDU Trigger PLUS securities due August 5, 2030, offering leveraged exposure to the worse performing of the S&P 500 Index and Dow Jones Industrial Average. Key features include:

• Leverage factor of 145% to 160% on positive performance
• Principal protection down to 75% of initial levels (downside threshold)
• Below threshold, investors face 1-for-1 losses based on worst performing index
• Estimated value of $955.00 per security

Notable risks include: no principal guarantee or interest payments, exposure to worst-performing index only, credit risk of Morgan Stanley, and limited secondary market trading. The securities will be priced on July 31, 2025, with final observation on July 31, 2030. Maximum return potential is uncapped but leveraged, while downside risk can result in complete loss of principal.

Positive

• Offers 145-160% leverage on potential upside returns for both S&P 500 and Dow Jones indices
• Provides downside protection against losses up to 25% decline in the worst-performing index
• 5-year maturity offers significant time horizon for potential market appreciation

Negative

• No principal protection if worst-performing index declines more than 25% at maturity
• No interim interest payments or dividends throughout the 5-year term
• Returns are capped and limited to the leverage factor (max 160%) even in strong bull markets
• Credit risk exposure to Morgan Stanley as the guarantor
• Estimated value ($955) is significantly below the issue price, indicating high embedded costs

Free Writing Prospectus to Preliminary Pricing Supplement No. 9,027

Registration Statement Nos. 333-275587; 333-275587-01

Dated July 1, 2025; Filed pursuant to Rule 433

Morgan Stanley

Worst -of SPX and INDU Trigger PLUS due August 5, 2030

This document provides a summary of the terms of the securities. Investors must carefully review the accompanying preliminary pricing supplement referenced below, product supplement, index supplement and prospectus, and the “Risk Considerations” on the following page, prior to making an investment decision.

Terms
Issuer:	Morgan Stanley Finance LLC
Guarantor:	Morgan Stanley
Underliers:	S&P 500® Index (SPX) and Dow Jones Industrial AverageSM (INDU)
Leverage factor:	145% to 160%
Downside threshold level:	75% of the initial level for each underlier
Pricing date:	July 31, 2025
Observation date:	July 31, 2030
Maturity date:	August 5, 2030
CUSIP:	61778K7J0
Estimated value:	$955.00 per security, or within $55.00 of that estimate
Preliminary pricing supplement:	https://www.sec.gov/Archives/edgar/data/895421/000183988225034326/ms9027_424b2-18686.htm

1All payments are subject to our credit risk

 

Hypothetical Payment at Maturity1

The payment at maturity will be based solely on the performance of the worst performing underlier, which could be either underlier. The payoff diagram and table below illustrate the payment at maturity for a range of hypothetical performances of the worst performing underlier over the term of the securities.

% Change in Closing Level of the Worst Performing Underlier	Payment at Maturity per Security
+60.00%	$1,870.00*
+40.00%	$1,580.00*
+20.00%	$1,290.00*
0.00%	$1,000.00
-20.00%	$1,000.00
-25.00%	$1,000.00
-26.00%	$740.00
-40.00%	$600.00
-60.00%	$400.00
-80.00%	$200.00
-100.00%	$0.00

*Assumes a leverage factor of 145%

 

 

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-584-6837.

Underlier(s)

For more information about the underlier(s), including historical performance information, see the accompanying preliminary pricing supplement.

Risk Considerations

The risks set forth below are discussed in more detail in the “Risk Factors” section in the accompanying preliminary pricing supplement. Please review those risk factors carefully prior to making an investment decision.

Risks Relating to an Investment in the Securities

●The securities do not guarantee the return of any principal and do not pay interest.

●The amount payable on the securities is not linked to the values of the underliers at any time other than the observation date.

●The market price of the securities may be influenced by many unpredictable factors.

●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.

●As a finance subsidiary, MSFL has no independent operations and will have no independent assets.

●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 original issue price reduce the economic terms of the securities, cause the estimated value of the securities to be less than the original issue price and will adversely affect secondary market prices.

●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.

●The securities will not be listed on any securities exchange and secondary trading may be limited.

●As discussed in more detail in the accompanying product supplement, investing in the securities is not equivalent to investing in the underlier(s).

●The U.S. federal income tax consequences of an investment in the securities are uncertain.

Risks Relating to the Underlier(s)

●Because your return on the securities will depend upon the performance of the underlier(s), the securities are subject to the following risk(s), as discussed in more detail in the accompanying product supplement.

oYou are exposed to the price risk of each underlier.

oBecause the securities are linked to the performance of the worst performing underlier, you are exposed to a greater risk of not receiving a positive return on the securities and/or sustaining a significant loss on your investment than if the securities were linked to just one underlier.

oAdjustments to an underlying index could adversely affect the value of the securities.

Risks Relating to Conflicts of Interest

●The calculation agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations with respect to the securities.

●Hedging and trading activity by our affiliates could potentially adversely affect the value of the securities.

Tax Considerations

You should review carefully the discussion in the accompanying preliminary pricing supplement under the caption “Additional Information About the Securities– United States federal income tax considerations” concerning the U.S. federal income tax consequences of an investment in the securities, and you should consult your tax adviser.

 

FAQ

What is the maturity date and leverage factor for MS's Trigger PLUS securities filed on June 28, 2025?

Morgan Stanley's Trigger PLUS securities have a maturity date of August 5, 2030, with a leverage factor ranging from 145% to 160%. These securities are linked to the performance of the S&P 500® Index and Dow Jones Industrial AverageSM.

What is the downside protection threshold for MS's new Trigger PLUS offering?

The downside threshold level is set at 75% of the initial level for each underlier (S&P 500® Index and Dow Jones Industrial AverageSM). This means investors are protected against losses as long as neither underlier declines more than 25% from its initial level at maturity.

What is the estimated value per security for MS's Trigger PLUS due 2030?

The estimated value is $955.00 per security, or within $55.00 of that estimate. This value is less than the original issue price due to factors including the lower rate MS pays and costs associated with issuing, selling, structuring, and hedging the securities.

How is the payment at maturity calculated for MS's Worst-of SPX and INDU Trigger PLUS?

The payment at maturity is based solely on the performance of the worst performing underlier between S&P 500® and Dow Jones Industrial Average. For example, with a 145% leverage factor, a +40% increase in the worst performing underlier would result in a payment of $1,580 per security, while a -40% decrease would result in a payment of $600 per security.

What are the key risks of investing in MS's Trigger PLUS securities filed in June 2025?

Key risks include: 1) No guaranteed return of principal and no interest payments, 2) Securities are subject to Morgan Stanley's credit risk, 3) Payment is only linked to underlier values on the observation date (July 31, 2030), 4) Exposure to the worst performing underlier between S&P 500® and DJIA, and 5) Limited secondary market trading as securities won't be listed on any exchange.