(Bloomberg) -- Steve Schwarzman said he was puzzled by the high valuation of WeWork, comparing it to a similar company that Blackstone Group Inc. owned that was “worth a few billion dollars.” Hearing about WeWork’s pre-initial public offering value, Schwarzman said: “I sort of went, what? How do you get this? It doesn’t seem right to me given what they’re doing,” adding that he hasn’t studied WeWork. He didn’t name the company Blackstone owned. Schwarzman, whose firm is among the world’s biggest real estate investors, said WeWork’s business model is tied to the health of the economy. The Blackstone co-founder spoke Wednesday at the Economic Club of New York. “There are other issues in terms of short-term leases, and owning them long-term and that’s all fine unless the world collapses,” he said. “Then it’s not so fine.” WeWork pushed back its much-awaited initial public offering on Tuesday as the company sought more time to allay investor doubts over its governance, slashed valuation and business prospects. In January, SoftBank Group Corp. made its last investment in WeWork, at a valuation of $47 billion. The company was more recently expected to be valued at only about $15 billion. A representative for WeWork declined to comment on Schwarzman’s remarks. In a wide-ranging discussion, Schwarzman also tackled negative interest rates, saying they hinder economic growth and punish consumers. “My strong view is I don’t think it makes any sense whatsoever,” Schwarzman said. “Why would I take my money and pay somebody to take it? It’s hard enough to make it. I really just don’t understand the theory behind negative interest rates.” Negative rates make it difficult for financial institutions to make money and that has broad effects, he said. “If banks have trouble earning money because they don’t have a normal interest rate spread then they can’t accumulate capital so they can’t expand,” he said. “So if they can’t expand, they can’t give credit, extend credit to people and to businesses. So those economies won’t grow at any reasonable amount.” To contact the reporter on this story: Sabrina Willmer in New York at swillmer2@bloomberg.net To contact the editors responsible for this story: Alan Mirabella at amirabella@bloomberg.net, Melissa Karsh ©2019 Bloomberg L.P.
Blackstone CEO Schwarzman said he was puzzled by Blackstone ’s valuation. Speaking at the Economic Club of New York on Tuesday , Steve Schwarzman compared the company with a similar business that Blackstone owns, which he said was worth only about $15 billion and that WeWork 's valuation “doesn’t seem right”, although he did add that he has not studied WeWork .