Samsung Electronics shares fell nearly 7 percent to hit their lowest level in two months after the company urged Galaxy Note 7 users to switch off and return their devices following reports batteries in the handsets were catching fire.
Over 16 trillion won ($14.3 billion) was wiped off Samsung's market capitalization amid increased concern from investors over the potential damage that the recall could cause to the world's largest smartphone maker by market share.
Shares of Samsung closed down 6.98 percent at 1,465,000 won.
Myung Sub Song, an analyst at HI Investment & Securities, said that the recall issue could have an impact of around 1 trillion won ($900 million) to Samsung's third-quarter operating profit. Analysts are expecting shipments of the Note 7 to total around 6 million in the third and fourth quarters, down from estimates of around 12-15 million.
"The most important thing is whether the new Note 7 which will be released from now on will have another problem or not. If it has a problem then it will have a bad impact to the Note 7 and also Galaxy S8 which will be released in the first half of next year," Myung Sub Song told CNBC by phone on Monday.
The Galaxy S8 is slated to be Samsung's next flagship device.