NEW YORK (CNN/Money) - Martha Stewart's holdings in her own company have taken nearly a $200 million hit, wiping out more than a quarter of her net worth according to one estimate, since she became linked to an insider trading scandal involving drugmaker ImClone Systems Inc.

Stewart has insisted she did nothing wrong when she sold nearly 4,000 shares of ImClone stock Dec. 27, the day before it was revealed that the Food and Drug Administration had refused to consider an application for the company's key cancer drug. She saved between $40,000 and $57,000 by selling when she did rather than on the first trading day after the news of the FDA action was revealed.

But the sale has forced her to defend herself to congressional, Securities and Exchange Commission and Justice Department investigators, issue two statements about the transaction, and face hundreds of media stories about her stock sale.

Since the scandal hit, the value of Martha Stewart Living Omnimedia (MSO: down $3.52 to $12.45, Research, Estimates) has lost just under a third of its value due to investor concerns that the company's brand could be tarnished. The company publishes books and magazines and sells branded home furnishings, clothing and food.

The company's stock was as low as $11.75, off 26 percent, in Monday trading before rebounding to about a 20 percent decline in the late afternoon. The fall followed a published report that an employee at her stock broker, Merrill Lynch & Co., had not backed her statement that she sold the stock under a "stop-loss order" by which her shares would be sold once they went under $60 a share.

The stock in her company has dropped about $6 a share since the June 6 close of $19.01. After the market closed that night, the first wire service report from Associated Press revealed Stewart's ImClone stock sale.

Stewart was ranked the 381st-richest American by Forbes magazine, which estimated her net worth at $650 million, so a $200 million drop in stock value could wipe out 31 percent of her net worth if the magazine's estimate was correct.

Stewart is the majority shareholder of her company, whose latest proxy statement puts her holdings at 30.7 million Class A common shares, or almost two-thirds of shares outstanding. Stewart also holds 100 percent of the company's class B common stock, which gives her control of about 94 percent of the company's voting power, according to the proxy.

Stewart has not been charged with any wrongdoing by any authority to this point. But former ImClone CEO Samuel Waksal, a friend of Stewart, does face federal insider trading charges alleging he tried to sell his own stock and alert friends and family members to do the same before the FDA action was revealed.

Representatives for Martha Stewart Living Omnimedia could not be reached for comment. Jon Fox, analyst with Adams, Harkness & Hill, said the plunge in the stock price did not change his view of the company's long-term outlook.

"It's going to continue to be volatile until the investigation is complete," said Fox. "We believe the fundamentals of the business itself continue to improve."

Stewart's control of the company and its dependence on her name as its brand probably mean that her job is safe. According to the proxy, her contract would provide a severance package of $8 million, based on a formula that gives her three times her annual base salary of $900,000, which is three times her highest bonus during the previous three years, which in this case would be the $1.77 million she received as a bonus in 2000.