Samsung has seen PS11 billion ($A19 billion) wiped off its market value after recalling its Note 7 smartphone because of the risk of it bursting into flames.
Shares sank nearly seven per cent to PS1.465 million on Monday after it previously told customers to switch off and return their phones amid reports of the batteries exploding after charging.
The sharp fall on the Korean stock market comes after US aviation authorities warned travellers not to turn on or charge the Note 7 during flights or store them in checked bags.
Investors fear the fiasco could damage Samsung's reputation and hammer smartphone sales.
The sliding share price will prove food for thought for Lee Jae-yong, the only son of its ailing chairman, who was nominated to join the Samsung Electronics board of directors on Monday.
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The 48-year-old Harvard-educated vice chairman at Samsung is thought to have been making key decisions for Samsung since his father Lee Kun-hee, 74, fell ill.
America's aviation regulator - the Federal Aviation Administration - issued its warning against the Note 7 on Thursday, with many airlines, including Australia's Qantas, immediately enforcing its advice.
In a further blow to the company, the US Consumer Product Safety Commission has also urged American users to turn the phones off and leave them off.
The world's largest smartphone maker scrambled to address the problem last week, recalling 2.5 million Note 7 phones and vowing to replace all the devices which have been handed in.
The debacle looks set to be a costly setback in its hard-fought battle against Apple to dominate the global mobile phone market.
