Takata has been hit by a huge recall of faulty and potentially deadly airbags used worldwide by carmakers.
It has been linked to 11 deaths and more than 100 injuries.
The shares dropped following a report from Bloomberg citing unnamed bidders.
Reports emerged last week that Takata was looking for private equity groups and other car part makers as investors to help it with its financial situation.
However, on Tuesday, Bloomberg reported that several bidders were considering a push for bankruptcy protection instead as it might mean lower repayments to debt holders.
The move would mean the company being put under administration so it can be restructured with the help of new investors.
Through this process, future investors can be relieved of some of the company's debts and obligations.
Takata has paid out $70m (£48m) in fines from US regulators so far over the faulty airbags.
In May, the company reported a net loss of 13.1bn yen ($128.7m, £99m) for its financial year ending in March.

The 30-year-old Scot, who raced for Force India from 2010 to 2013, will be back-up for race drivers Felipe Massa and Lance Stroll.
Deputy team principal Claire Williams said: "It's great for us to retain someone of Paul's experience."
Di Resta will combine F1 duties with racing for Mercedes in Germany's DTM touring car series.
He said he was "delighted" to stay at Williams and "looking forward to understanding the new regulations" introduced to F1 this season in an attempt to make the cars faster, more dramatic and more appealing to the audience.
Williams' new car will be revealed to the public on Friday before pre-season testing starts in Spain on 27 February.
Di Resta's best race results in F1 have been two fourth places in Singapore in 2012 and Bahrain in 2013. He was the DTM champion for Mercedes in 2010.
Part of his responsibilities at Williams will involve helping Brazilian veteran Massa, 35, support Stroll, an 18-year-old Canadian rookie who brings financial backing reported to be at least £20m to the team.
Massa retired at the end of last season but was persuaded to come back for one final year after Mercedes approached Williams to release Valtteri Bottas to them following world champion Nico Rosberg's retirement.
Takata shares have fallen almost 12% after a report that potential bidders are considering bankruptcy proceedings for the company to mitigate their liability following the firm's airbag scandal.
[NEXT_CONCEPT]
Paul di Resta is to stay as Williams reserve driver for a second season in 2017.