Sony is planning a multi-billion dollar revamp
Sony shares have plunged by 15% as investors punish the firm for surprisingly weak results.
Almost $8bn has been wiped of the value of the world's leading consumer electronics maker since it made the shock announcement last Thursday.
The sharp decline in Sony's share price sent the wider Japanese stock market down 1.2% to close at new 20-year lows on Monday.
Sony's shares closed at their weakest level in seven years after falling by the daily limit for the second consecutive day of trading.
Investors have not been comforted by Sony's decision to embark on a multi-billion dollar three-year revamp to address the decline.
The company, creator of the PlayStation and maker of last year's hit film Spider-Man, said it lost 111bn yen (£579m; $923m) in the first three months of 2003.
This was almost 20 times the loss for the same period last year.
Time of transition
Part of the problem was the heavy cost of restructuring the ailing music division, but the widening losses have prompted Sony to spend 1.3 trillion yen ($10.8bn; £6.8bn) pulling itself back into shape.
The company plans to spend 500bn yen on new technology development, the same amount on price cuts for existing products and a further 300bn on restructuring the company and cutting costs.
Sony's chief executive made it clear that without prompt action things would continue to deteriorate.
"We cannot leave the situation unaddressed and let profitability tumble... In a way, we are now at a key transition phase," Sony chief executive Nobuyuki Idei said.