FWP 1 dp08049_fwp-ps449.htm
 
 
December 2007
Pricing Sheet dated December 21, 2007 relating to
Preliminary Terms No. 449 dated November 27, 2007 to
Registration Statement No. 333-131266
Filed pursuant to Rule 433
STRUCTURED INVESTMENTS
Opportunities in Equities
Bear Market PLUS Based Inversely on the Value of the S&P 500® Index due January 20, 2009
Performance Leveraged Upside SecuritiesSM
 
PRICING TERMS – DECEMBER 21, 2007
Issuer:
Morgan Stanley
Maturity date:
January 20, 2009
Underlying index:
S&P 500® Index
Aggregate principal amount:
$5,700,000
Payment at maturity:
If the final index value is less than the initial index value,
$10 + enhanced downside payment
In no event will the payment at maturity exceed the maximum payment at maturity.
If the final index value is greater than or equal to the initial index value,
$10 – upside reduction amount
In no event will the payment at maturity be less than the minimum payment at maturity.
Enhanced downside payment:
$10 x leverage factor x index percent decrease
Upside reduction amount:
$10 x index percent increase
Index percent decrease:
(initial index value – final index value) / initial index value
Index percent increase:
(final index value – initial index value) / initial index value
Initial index value:
1,484.46, the index closing value of the underlying index on the pricing date
Final index value:
The index closing value of the underlying index on the valuation date
Valuation date:
January 15, 2009, subject to adjustment for certain market disruption events
Leverage factor:
400%
Maximum payment at maturity:
$13.25 (132.5% of the stated principal amount) per Bear Market PLUS
Minimum payment at maturity:
$2 (20% of the stated principal amount) per Bear Market PLUS
Stated principal amount:
$10 per Bear Market PLUS
Issue price:
$10 (see “Commissions and Issue Price” below)
Pricing date:
December 21, 2007
Original issue date:
December 31, 2007 (5 business days after the pricing date)
CUSIP:
61747W786
Listing:
The Bear Market PLUS will not be listed on any securities exchange.
Agent:
Morgan Stanley & Co. Incorporated
United States Federal Taxation:
Please see page 2 of this pricing sheet.
Commissions and Issue Price:
Price to Public(1)
Agent’s Commissions(1)(2)
Proceeds to Company
Per Bear Market PLUS
$10
$0.15
$9.85
Total
$5,700,000
$85,500
$5,614,500

(1)
The actual price to public and agent’s commissions for a particular investor may be reduced for volume purchase discounts depending on the aggregate amount of Bear Market PLUS purchased by that investor.  The lowest price payable by an investor is $9.95 per Bear Market PLUS.  Please see “Syndicate Information” on page 5 of the accompanying preliminary terms for further details.
(2)
For additional information, see “Plan of Distribution” in the accompanying prospectus supplement for PLUS.
 
“Standard & Poor’s®,” “S&P®,” “S&P 500®,” “Standard & Poor’s 500” and “500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Morgan Stanley.  The Bear Market PLUS are not sponsored, endorsed, sold or promoted by The McGraw-Hill Companies, Inc. and The McGraw-Hill Companies, Inc. makes no representation regarding the advisability of investing in the Bear Market PLUS.
 
YOU SHOULD READ THIS DOCUMENT TOGETHER WITH THE PRELIMINARY TERMS DECRIBING THE OFFERING AND THE RELATED PROSPECTUS SUPPLEMENT AND PROSPECTUS, EACH OF WHICH CAN BE ACCESSED VIA THE HYPERLINKS BELOW.
 
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 this offering will arrange to send you the prospectus if you request it by calling toll-free 1-800-584-6837.
 
 
 
 
Bear Market PLUS Based Inversely on the Value of the S&P 500® Index
Performance Leveraged Upside SecuritiesSM
 
 
 
United States Federal Taxation:
The issuer believes that, under current law, the Bear Market PLUS should be treated as a single financial contract that is an “open transaction” for U.S. federal income tax purposes.  Please see the applicable preliminary terms for the Bear Market PLUS.  However, on December 7, 2007, the Treasury Department and the IRS released a notice requesting comments on the U.S. federal income tax treatment of "prepaid forward contracts" and similar instruments (which may well include the Bear Market PLUS).  While the notice requests comments on appropriate transition rules and effective dates, Treasury regulations or other forms of guidance, if any, issued after consideration of these issues could materially and adversely affect the tax consequences of an investment in the Bear Market PLUS, possibly on a retroactive basis.  The notice focuses in particular on whether to require holders of such instruments to accrue income over the term of their investment.  It also asks for comments on a number of related topics, including the character of income or loss with respect to these instruments; the relevance of factors such as exchange-traded status of the instruments and the nature of the underlying property to which the instruments are linked; the degree, if any, to which any income (including any mandated accruals) realized by non-U.S. holders should be subject to withholding tax; and whether these instruments are or should be subject to the “constructive ownership” regime, which generally can operate to recharacterize certain long-term capital gain as ordinary income that is subject to an interest charge.  Both U.S. and non-U.S. investors considering an investment in the Bear Market PLUS should consult their tax advisers regarding the notice and its potential implications for an investment in the Bear Market PLUS.
 
 
 
 
December 2007
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