On Friday December 5th, 2008, uWink (NASDAQ: UWKI.OB) made an “odd lot” tender offer to purchase all shares of its common stock held by persons owning 99 shares or fewer on the close of business as of December 1, 2008. The offer is valid until 5:00 p.m. Eastern Time on Thursday, January 15, 2009.

This offer is designed to reduce the number of total shareholders of uWink’s stock to under 500, whereby uWink would then deregister their stock from the OTC/Bulletin board and spin off their technology licensing business as a dividend to existing stockholders.

As I just wrote about last week, uWink has serious liquidity issues and is taking an unprecedented step to take themselves out of the stock market, and make the company look more attractive for possible investment for the two separate entities that they will become: one a restaurant company, and one a software and licensing company.

As a result of this tender offer and the uncertainty surrounding the company and our investment, I am downgrading uWink to a HOLD.  I’ll break down my reasons within this post and explain in more detail what exactly is going on.

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They say that good things come in small packages.

While that might be true of AuthenTec’s fingerprint sensors, it sure wasn’t true with the nice little “Business Update” that AuthenTec provided on Sunday evening or their nice little share price after the close of today’s market.

AuthenTec (NASDAQ: AUTH), the world’s leading provider of fingerprint sensors and solutions to the PC, Wireless and Access Control markets, dropped a bombshell on all of us late Sunday night in announcing that they were lowering Q3/2008 and full year revenue and earnings forecasts, as well as announcing the loss of a customer that will represent over 35% of their revenue in 2008 and 2009.

In addition, AuthenTec held a conference all with analysts on Monday morning before the market opened to discuss the lowered forecast as well as the customer loss, in what is a highly unusual occurrence, which shows the severity of the situation.

Needless to say, Wall Street was none too pleased sending shares down over 60%, and frankly, neither am I.

What this calls into question now is our investment thesis.

Has it changed such that an investment in AuthenTec is no longer warranted?

What follows is a summary of AuthenTec’s “Business Update”, conference call highlights, and my take on the company’s future prospects, and my investing thesis.

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While a rising tide lifts all boats, the opposite also holds true.

Such has been the case with PeakStocks.com portfolio recommendation AAR Corp. (NYSE: AIR), which provides products and services to the aviation, aerospace, and defense industries.

Lately the words “aviation”, “aerospace” and “defense” have been about as popular as uttering the phrase “oil prices are higher”.

You can’t always escape the boom or the hammer that befalls a certain industry or sector, even if it appears that AAR is more protected from these concerns than other companies within its industry.

As a result of this and AAR’s upcoming earnings release in about 2 weeks, I am downgrading AAR’s shares to a HOLD if only temporarily, and for new money, until we get more clarification as to what’s going on with the industry, the companies that depend on AAR for business, and AAR’s business prospects for their 2009 fiscal year.

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After tearing through AuthenTec’s (Nasdaq: AUTH) latest 10-k filing, doing some number crunching, and evaluating both the overall market and the semiconductor sector, and recent company developments at AuthenTec, I have changed my investment thesis to a HOLD for the time being.

If you own shares in AuthenTec, as do I, hang onto them.

If you don’t own shares, nibble at today’s prices, but be advised that a stagnant or declining share price could be in the cards for the next quarter or two.

Here’s Why: Read the rest of this entry »