FWP 1 ms7906_fwp-11812.htm FREE WRITING PROSPECTUS TO PRELIMINARY PRICING SUPPLEMENT NO. 7,906

Free Writing Prospectus to Preliminary Pricing Supplement No. 7,906

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

Dated April 15, 2025; Filed pursuant to Rule 433

Morgan Stanley

3-Year Worst-of AMZN, GOOGL and MSFT Contingent Income Auto-Callable Securities

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


Summary Terms

Issuer:

Morgan Stanley Finance LLC

Guarantor:

Morgan Stanley

Underlying stocks:

Amazon.com, Inc. common stock (“AMZN”), Alphabet Inc. class A common stock (“GOOGL”) and Microsoft Corporation common stock (“MSFT”)

Stated principal amount:

$1,000 per security

Issue price:

$1,000 per security

Pricing date:

April 17, 2025

Original issue date:

April 23, 2025 (4 business days after the pricing date)

Maturity date:

April 20, 2028

Contingent quarterly coupon:

A contingent coupon will be paid on the securities on each coupon payment date but only if the determination closing price of each underlying stock is at or above its respective downside threshold level on the related observation date. If payable, the contingent quarterly coupon will be an amount in cash per stated principal amount corresponding to a return of 12.50% per annum (corresponding to approximately $31.25 per quarter per security) for each interest payment period for each applicable observation date.

If, on any observation date, the determination closing price of any underlying stock is less than its respective downside threshold level, we will pay no coupon for the applicable quarterly period.

Payment at maturity1:

If the securities have not been automatically redeemed prior to maturity, the payment at maturity will be determined as follows:

If the final share price of each underlying stock is greater than or equal to its respective downside threshold level, investors will receive the stated principal amount plus the contingent quarterly coupon with respect to the final observation date and any previously unpaid contingent quarterly coupons from the prior observation dates.

If the final share price of any underlying stock is less than its respective downside threshold level, investors will receive (i) the stated principal amount multiplied by (ii) the share performance factor of the worst performing underlying stock. Under these circumstances, the payment at maturity will be less than 60% of the stated principal amount of the securities and could be zero.

Early redemption:

If, on any redemption determination date, beginning on July 17, 2025, the determination closing price of each underlying stock is greater than or equal to its respective redemption threshold level, the securities will be automatically redeemed for an early redemption payment on the related early redemption date. No further payments will be made on the securities once they have been redeemed.

The securities will not be redeemed early on any early redemption date if the determination closing price of any underlying stock is below its respective redemption threshold level on the related redemption determination date.

Early redemption payment:

The early redemption payment will be an amount equal to the stated principal amount for each security you hold plus the contingent quarterly coupon with respect to the related observation date and any previously unpaid contingent quarterly coupons from the prior observation dates.

Initial share price:

The stock closing price on the pricing date for each underlying

Final share price:

The stock closing price on the final observation date for each underlying

Worst performing underlying stock:

The underlying stock with the largest percentage decrease from the respective initial share price to the respective final share price

Share performance factor:

Final share price divided by the initial share price

 

 

Redemption determination dates:

Quarterly, as set forth below, subject to postponement for non-trading days and certain market disruption events.

Early redemption dates:

Quarterly, as set forth below. If any such day is not a business day, that early redemption payment will be made on the next succeeding business day and no adjustment will be made to any early redemption payment made on that succeeding business day.

Observation dates:

Quarterly, as set forth below, subject to postponement for non-stock business days and certain market disruption events.

Coupon payment dates:

Quarterly, as set forth below; provided that if any such day is not a business day, that coupon payment will be made on the next succeeding business day and no adjustment will be made to any coupon payment made on that succeeding business day. The contingent quarterly coupon, if any, with respect to the final observation date will be paid on the maturity date.

Downside threshold level:

60% of the initial share price for each underlying

CUSIP / ISIN:

61778JXP0 / US61778JXP01

Preliminary pricing supplement:

https://www.sec.gov/Archives/edgar/data/895421/000183988225022185/ms7906_424b2-11811.htm

 

Observation dates /

Redemption determination dates

Coupon payment dates /

Early redemption dates

July 17, 2025

July 22, 2025

October 17, 2025

October 22, 2025

January 20, 2026

January 23, 2026

April 17, 2026

April 22, 2026

July 17, 2026

July 22, 2026

October 19, 2026

October 22, 2026

January 19, 2027

January 22, 2027

April 19, 2027

April 22, 2027

July 19, 2027

July 22, 2027

October 18, 2027

October 21, 2027

January 18, 2028

January 21, 2028

April 17, 2028 (final observation date)

April 20, 2028 (maturity date)

 

Hypothetical Payout at Maturity1 (if the securities have not been previously redeemed)

Change in Worst Performing Underlying

Payment at Maturity

(excluding any coupon payable at maturity)

+40%

$1,000.00

+30%

$1,000.00

+20%

$1,000.00

+10%

$1,000.00

0%

$1,000.00

-10%

$1,000.00

-20%

$1,000.00

-30%

$1,000.00

-40%

$1,000.00

-41%

$590.00

-50%

$500.00

-60%

$400.00

-70%

$300.00

-80%

$200.00

-90%

$100.00

-100%

$0

1 All payments are subject to our credit risk

 

 

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.

Underlying Stocks

For more information about the underlying stocks, 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.

●The securities do not provide for the regular payment of interest and may pay no interest over the entire term of the securities.

●The contingent coupon, if any, is based only on the determination closing prices of the underlying stocks on the related quarterly observation date at the end of the related interest period.

●Investors will not participate in any appreciation in the price of any underlying stock.

●The market price will 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.

●Reinvestment risk.

●The securities will not be listed on any securities exchange and secondary trading may be limited, and accordingly, you should be willing to hold your securities for the entire 3-year term of the securities.

●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 approximately $957.30 per security, or within $30.00 of that estimate, and 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.

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

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

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

Risks Relating to the Underlying Stocks

●You are exposed to the price risk of all of the underlying stocks, with respect to both the contingent quarterly coupons, if any, and the payment at maturity, if any.

●Investing in the securities is not equivalent to investing in the common stock of Amazon.com, Inc., the class A common stock of Alphabet Inc. or the common stock of Microsoft Corporation.

●No affiliation with Amazon.com, Inc., Alphabet Inc. or Microsoft Corporation.

●We may engage in business with or involving Amazon.com, Inc., Alphabet Inc. or Microsoft Corporation without regard to your interests.

●Governmental regulatory actions, such as sanctions, could adversely affect your investment in the securities.

●The antidilution adjustments the calculation agent is required to make do not cover every corporate event that could affect the underlying stocks.

Tax Considerations

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