1. A false or a baseless news story that evokes mass hysteria or promotes a conspiracy.
2. An opinion presented as news with the intention of causing hysteria.
1) The radio talk show host's conspirastory presented excerpts from a paper written by the president during college. The source material came from a parody website. The talk show host maintained that even parody has the basis of truth. So, the story is based on truth.
2) People who lack commonsense will believe a well conceived conspirastory.