MORGAN STANLEY — Capital/Financing Update 2010

Aug 27, 2010

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Pricing Sheet dated August 25, 2010 relating to Preliminary Terms No. 494 dated August 16, 2010 to Registration Statement No. 333-156423 Filed pursuant to Rule 433

STRUCTURED INVESTMENTS

Opportunities in U.S. and International Equities

Buffered PLUS Based on a Basket of Exchange-Traded Funds and an Index due August 25, 2014

Buffered Performance Leveraged Upside Securities SM

PRICING TERMS – AUGUST 25, 2010
Issuer:	Morgan Stanley
Maturity date:	August 25, 2014
Original issue price:	$10 per Buffered PLUS (see “Commissions and Issue Price” below)
Stated principal amount:	$10 per Buffered PLUS
Pricing date:	August 25, 2010
Original issue date:	August 30, 2010 (3 business days after the pricing date)
Aggregate principal amount:	$10,000,000
Interest:	None

Basket:	Bloomberg ticker symbol	Basket component weighting	Initial basket component value	Multiplier
Shares of the iShares ® MSCI EAFE Index Fund (the “EFA Shares”)	EFA	33.333%	49.57	0.672443009
Shares of the iShares ® MSCI Emerging Markets Index Fund (the “EEM Shares”)	EEM	33.333%	39.86	0.836251881
S&P 500 ® Index (the “SPX Index”)	SPX	33.333%	1,055.33	0.03158538
We refer to the EFA Shares and EEM Shares, collectively, as the underlying shares, the SPX Index as the underlying index and, together with the underlying shares, as the basket components.

Payment at maturity (per Buffered PLUS):	§ If the final basket value is greater than the initial basket value: $10 + the leveraged upside payment, subject to the maximum payment at maturity.
	§ If the final basket value is less than or equal to the initial basket value but has decreased by an amount less than or equal to the buffer amount of 20% from the initial basket value: $10
	§ If the final basket value is less than the initial basket value and has decreased by an amount greater than the buffer amount of 20% from the initial basket value: ($10 x the basket performance factor) + $2.00 This amount will be less than the stated principal amount of $10. However, under no circumstances will the payment due at maturity be less than $2.00 per Buffered PLUS.
Leveraged upside payment:	$10 x leverage factor x basket percent increase
Leverage factor:	150%
Basket percent increase:	(final basket value – initial basket value) / initial basket value
Basket performance factor:	final basket value / initial basket value
Buffer amount:	20%
Maximum payment at maturity:	$17.10 per Buffered PLUS (171% of the stated principal amount)
Minimum payment at maturity:	$2.00 per Buffered PLUS (20% of the stated principal amount)
Initial basket value:	100, which is equal to the sum of the products of the initial basket component values of each of the basket components, as set forth under “Basket—Initial basket component value” above, and the applicable multiplier for each of the basket components.
Final basket value:	The basket closing value on the valuation date.
Valuation date:	August 20, 2014, subject to postponement for non-trading days or non-index business days, as applicable, and certain market disruption events.
Basket closing value:	The basket closing value on any day is the sum of the products of the basket component closing values of each of the basket components and the applicable multiplier for each of the basket components on such date.
Basket component closing value:	In the case of each of the underlying shares, the closing price of one underlying share times the adjustment factor. In the case of the underlying index, the index closing value as published by the index publisher.
Multiplier:	The multiplier was set on the pricing date based on each basket component’s respective initial basket component value so that each basket component represents its applicable basket component weighting in the predetermined initial basket value. Each multiplier will remain constant for the term of the Buffered PLUS. See “Basket—Multiplier” above.
Adjustment factor:	1.0, subject to adjustment for certain corporate events affecting the underlying shares.
Listing:	The Buffered PLUS will not be listed on any securities exchange.
CUSIP:	61759G711
ISIN:	US61759G7117
Agent:	Morgan Stanley & Co. Incorporated (“MS & Co.”), a wholly-owned subsidiary of Morgan Stanley. See “Supplemental information regarding plan of distribution; conflicts of interest” in the accompanying preliminary terms.

Commissions and Issue Price:	Price to Public (1)	Agent’s Commissions (1)(2)	Proceeds to Issuer
Per Buffered PLUS	$10	$0.30	$9.70
Total	$10,000,000	$300,000	$9,700,000

(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 notes purchased by that investor. The lowest price payable by an investor is $9.90 per note. Please see “Syndicate Information” in the accompanying preliminary terms for further details.

(2) Selected dealers, including Morgan Stanley Smith Barney LLC (an affiliate of the Agent), and their financial advisors will collectively receive from the Agent, MS & Co., a fixed sales commission of $0.30 for each Buffered PLUS they sell. For additional information, see “Supplemental information concerning plan of distribution; conflicts of interest” in the accompanying preliminary terms and “Plan of Distribution (Conflicts of Interest)” 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 Buffered 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 Buffered PLUS.

You should read this document together with the preliminary terms describing the offering and the related prospectus supplement and prospectus, each of which can be accessed via the hyperlinks below.

EFPlaceholder Preliminary Terms No. 494 dated August 16, 2010

EFPlaceholder Prospectus Supplement for PLUS dated December 22, 2009

EFPlaceholder Prospectus dated December 23, 2008

The Buffered PLUS are not bank deposits and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank.

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 the 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