Morgan Stanley Finance LLC filed Preliminary Pricing Supplement No. 17,906 on August 4, 2026, under Rule 424(b)(2), offering Contingent Income Auto-Callable Securities with Daily Trigger Monitoring due February 16, 2028, linked to the worst performing of the S&P 500 Index, the Russell 2000 Index, and the Nasdaq-100 Index, and fully and unconditionally guaranteed by Morgan Stanley (NYSE: MS).

Key Highlights

  • Stated principal and issue price: $1,000 per security, with an estimated value on the pricing date of approximately $969.10 per security, or within $35.00 of that estimate.
  • Contingent coupon rate: 6.25% per annum, payable only if the closing level of each underlier is greater than or equal to its coupon barrier level on the related observation date.
  • Maturity date: February 16, 2028, with a final observation date of February 11, 2028, subject to postponement.
  • Call threshold level: 90% of each underlier's initial level, with the first redemption determination date of November 11, 2026.
  • Principal at risk: If a trigger event occurs on any trading day and the final level of any underlier is below its initial level, investors lose 1% for every 1% decline in the worst performing underlier, and the payment at maturity could be zero.
  • Third-party data analytics fee: MS & Co. may pay a third-party data analytics provider a fee of $0.50 for each security sold in this offering.

Structure and Risk Profile of the MSFL Auto-Callable Securities

According to the filing, the securities are unsecured obligations of Morgan Stanley Finance LLC, issued as part of MSFL's Series A Global Medium-Term Notes program, and are fully and unconditionally guaranteed by Morgan Stanley. The agent is Morgan Stanley & Co. LLC, an affiliate of MSFL. The pricing date and strike date are both August 11, 2026, with an original issue date of August 14, 2026. The filing states that all payments are subject to the issuer's credit risk, and the securities are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The filing describes five redemption determination dates: November 11, 2026; February 11, 2027; May 11, 2027; August 11, 2027; and November 11, 2027, each subject to postponement. If, on any of these dates, the closing level of each underlier is greater than or equal to its call threshold level (90% of its initial level), the securities are automatically redeemed for the stated principal amount plus the contingent coupon for that period. The filing specifies that under no circumstances will the securities be redeemed prior to the first redemption determination date of November 11, 2026.

The filing warns that the worst-of structure does not provide asset diversification benefits. A decline in any underlier beyond its coupon barrier level or downside threshold level will adversely affect returns "even if the other underliers have appreciated or have not declined as much," according to the filing. The filing further states that investors "will not participate in any appreciation of any underlier" and must be willing to accept the risk of losing their entire initial investment.

What Was Disclosed

MSFL disclosed the preliminary terms of auto-callable, principal-at-risk notes linked to three equity indexes, with a 6.25% contingent annual coupon, an estimated value of approximately $969.10 per security, a maturity of February 16, 2028, and full exposure to the worst performing underlier if a trigger event occurs.